U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

86–633 PDF 2014

S. Hrg. 113–495 

ONE YEAR LATER: EXAMINING THE ONGOING 

RECOVERY FROM HURRICANE SANDY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON EMERGENCY 

MANAGEMENT, INTERGOVERNMENTAL RELATIONS, 

AND THE DISTRICT OF COLUMBIA 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

NOVEMBER 6, 2013 

Available via http://www.fdsys.gov 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

RICHARD J. KESSLER, Staff Director 

KEITH B. ASHDOWN, Minority Staff Director 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN M. CORCORAN, Hearing Clerk 

SUBCOMMITTEE ON EMERGENCY MANAGEMENT, INTERGOVERNMENTAL 

RELATIONS, AND THE DISTRICT OF COLUMBIA 

MARK BEGICH, Alaska Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

JON TESTER, Montana 

HEIDI HEITKAMP, North Dakota 

RAND PAUL, Kentucky 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

MICHAEL B. ENZI, Wyoming 

PAT MCQUILLAN, Staff Director 

BRANDON BOOKER, Minority Staff Director 

KELSEY STROUD, Chief Clerk 
(III) 

C O N T E N T S 

Opening statement: Page 

Senator Begich .................................................................................................. 1 

Senator Landrieu .............................................................................................. 3 

Senator Booker ................................................................................................. 3 

Senator Menendez ............................................................................................ 5 

Senator Gillibrand ............................................................................................ 7 

Senator Schumer .............................................................................................. 9 

WITNESSES 

WEDNESDAY, NOVEMBER 6, 2013 

Hon. Shaun Donovan, Secretary, U.S. Department of Housing and Urban 

Development ......................................................................................................... 10 

Hon. John Porcari, Deputy Secretary, U.S. Department of Transportation ....... 13 

Hon. W. Craig Fugate, Administrator, Federal Emergency Management Agency, U.S. Department of Homeland Security ....................................................... 14 

Hon. Jo-Ellen Darcy, Assistant Secretary of the Army (Civil Works), U.S. 

Department of Army ............................................................................................ 16 

Hon. Kathleen S. Tighe, Chair, Recovery Accountability and Transparency 

Board ..................................................................................................................... 18 

Caswell F. Holloway, Deputy Mayor for Operations, City of New York ............. 20 

ALPHABETICAL LIST OF WITNESSES

Darcy, Hon. Jo-Ellen: 

Testimony .......................................................................................................... 16 

Prepared statement .......................................................................................... 73 

Donovan, Hon. Shaun: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 43 

Fugate, Hon. W. Craig: 

Testimony .......................................................................................................... 14 

Prepared statement .......................................................................................... 58 

Holloway, Caswell F.: 

Testimony .......................................................................................................... 20 

Prepared statement with attachment ............................................................. 88 

Porcari, Hon. John: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 50 

Tighe, Hon. Kathleen S.: 

Testimony .......................................................................................................... 18 

Prepared statement .......................................................................................... 79 

APPENDIX 

Hurricane Sandy Rebuilding Task Force paper .................................................... 110 

HUD Documents ...................................................................................................... 121 

Questions and responses for the Record from: 

Mr. Donovan ..................................................................................................... 169 

Mr. Porcari ........................................................................................................ 175 

Mr. Fugate ........................................................................................................ 178 

Ms. Darcy .......................................................................................................... 185 

Ms. Tighe ........................................................................................................... 189 

Mr. Holloway ..................................................................................................... 196 

Mr. Ferzan, State of New Jersey ............................................................................ 199 

(1) 

ONE YEAR LATER: EXAMINING THE ONGOING 

RECOVERY FROM HURRICANE SANDY 

WEDNESDAY, NOVEMBER 6, 2013 

U.S. SENATE, SUBCOMMITTEE ON EMERGENCY MANAGEMENT, INTERGOVERNMENTAL RELATIONS, AND THE DISTRICT OF COLUMBIA, OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:33 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Mark Begich, Chairman of the Subcommittee, presiding. 

Present: Senators Begich, Landrieu, Booker, and Paul. 

Also present: Senators Schumer, Menendez, and Gillibrand. 

OPENING STATEMENT OF SENATOR BEGICH 

Senator BEGICH. Thank you for being patient. We are waiting 

just a couple more minutes, and then we will start. But I thank 

you all for being here. Just hang tight. Thanks. 

[Pause.] 

Good afternoon and welcome to the Subcommittee on Emergency 

Management, Intergovernmental Relations, and the District of Columbia. We thank you all for being here. 

We are here today to examine the recovery in the Northeast one 

year after Hurricane Sandy came ashore on October 29, 2012. As 

we mark this solemn anniversary, we owe it to ourselves and to 

those who were lost a year ago to continue to learn from Hurricane 

Sandy to improve disaster response and recovery across the country. 

As we all know, the next big disaster can happen at any time 

anywhere. In my home State of Alaska, we have had our fair share 

of disasters from the Gulf of Alaska earthquake to the Exxon 

Valdez oil spill. More recently, we saw a devastating flood along 

the Yukon River. The village of Galena continues to face challenges, but their ongoing recovery is a testament in the same type 

of Federal, State, and local coordination that was so crucial in the 

months following Hurricane Sandy. 

As co-chair of National Preparedness Month, which wrapped up 

at the end of September, I believe it is also important to remember 

that individuals play a large role in preparing their communities 

for disasters. 

Following Hurricane Sandy, we saw citizens from around the 

country donate their time, money, resources, and expertise to help 
2 

the affected area. Nonprofit organizations like the Red Cross mobilized volunteers and leveraged nongovernmental resources. It is 

this whole-of-community response that proves to be the best practice following large disasters. 

Alaskans take care of our own neighbors in times of need, which 

is why I voted to support the much needed funding for disaster relief following Hurricane Sandy. We understand that the interconnected infrastructure is both this country’s biggest asset and 

our biggest vulnerability. While all disasters begin locally, their effects can reach far beyond established geographic boundaries. 

One of the most critical aspects of the recovery process following 

a disaster is learning from mistakes and integrating those lessons 

learned. Since Hurricane Katrina, the Federal Emergency Management Agency (FEMA) has worked with other members of the Federal family to institutionalize recovery reforms. The agencies released the National Disaster Recovery Framework (NDRF), and it 

is already being used today in States across the country, including 

my home State of Alaska. 

All the agencies represented here today have illustrated a fierce 

commitment to response and recovery. I applaud their efforts, but 

we can do better, and our responsibility as an oversight committee 

is to make sure that we do better. 

One area that I believe requires additional oversight from the 

Congress is the financial management of the Hurricane Sandy supplemental funding. In January, Congress approved more than $50 

billion to aid with response and recovery efforts being performed by 

19 Federal agencies. Assuring this money is spent in a timely fashion is critical. As we know, there are many communities and individuals still in need over a year from the storm. We must also ensure that taxpayer dollars are being spent wisely. 

As stewards of the public money, Federal agencies must be accountable for their expenditures and must be prepared to communicate exactly how these funds are being used. I do not advocate 

for burdensome reporting requirements that slow down recovery, 

but controls must exist to protect our national investment. We 

must assure that laws and regulation that govern the preparedness, mitigation, response, and the recovery support robust and resilient communities across the country. This must be the top priority. 

I look forward to hearing the testimony of the witnesses and 

today we are doing something a little different. When Senator Paul 

gets here, we will interrupt the flow and allow him his opening 

statement. We have also invited Members that are not on this 

Committee to participate; but were affected by Hurricane Sandy. 

We are also joined by Senator Landrieu here, whose community 

was clearly affected by Hurricane Katrina. 

What I have asked Members to do is make sure you have—we 

will have your full statements in the record, and then a reminder 

that we also want to hear from many of our folks here to testify. 

So we will start with Senator Landrieu. Then from there I will 

do it in order of appearance. 
3 

OPENING STATEMENT OF SENATOR LANDRIEU 

Senator LANDRIEU. Thank you, Mr. Chairman. I am going to 

leave my comments briefly, submit my full statement to the record, 

and honor the delegation from the Northeast that is here. The 

work of Senators Schumer, Menendez, and Gillibrand was absolutely essential to this recovery effort, and the bill would not have 

been passed without their steadfast support in crafting legislation. 

Of course, welcome, Senator Booker, to the Committee, former 

mayor right in the middle of the storm as it occurred, I am sure 

can bring some extraordinary expertise to the Senate and to this 

Committee as we struggle to build a better response to disasters 

of all sorts, man-made or natural, small, medium, and catastrophic, 

which was clearly the case with Hurricane Katrina and came very 

close in Hurricane Sandy. 

So we have a long way to go, Mr. Chairman, but I appreciate the 

work of this special Subcommittee, because it is what mayors and 

county commissioners and chambers of commerce and individual 

families and, just consumers and residents and citizens count on us 

to do our best work in times of a disaster. They know that their 

government will be there for them and helping them to recover. 

So I will submit my full statement to the record, but, again, I 

really thank the Northeast delegation for their extraordinary work 

in the recovery, and we managed to even get a little bit of money 

out of the bill for Louisiana to keep going with our ongoing permanent recovery of the many storms that hit our State. 

Senator BEGICH. Thank you very much, Senator Landrieu. 

Senator Paul does not have an opening statement, but I want to 

thank him for attending and being part of this. He is the Ranking 

Member, and it is important that we do continue to analyze all 

these issues related to the emergency response of our country. 

So the order of attendance is I have Senator Booker next, and 

he is so new, you can tell by his sign plate. [Laughter.] 

Or he just brought his own as a former mayor, I do not know, 

but we really appreciate—— 

Senator MENENDEZ. Mr. Chairman, it gets smaller though. 

Senator BEGICH. Senator Menendez, you were not supposed to 

say that. We want him to learn that process. But we thank you for 

being here, and I will start with you. Then I will go to Senator 

Menendez, Senator Gillibrand, and Senator Schumer in that order. 

OPENING STATEMENT OF SENATOR BOOKER 

Senator BOOKER. First of all, I cannot thank you enough, Senator 

Begich and Senator Paul, for hosting this very important hearing. 

As you know, not only do I appreciate the opportunity to participate, but this is very clearly my first hearing as a Senator, and it 

could not be on a more important issue to the people of my State. 

I would also like to thank those testifying, including a long-time 

friend of mine, Secretary Donovan, who has been a partner with 

me on many issues back when I was mayor, and I look forward to 

working with him even closer now to the benefit of our State. I look 

forward to hearing what he has to say as well as those others who 

are testifying today, especially Administrator Fugate, because we 

are going to be meeting later on this week to discuss the issues, 

and I appreciate you making time to do that. 
4 

In the aftermath of Hurricane Sandy, many of the people in this 

room played such critical roles, holding multiple hearings and advocating for a robust Federal response to ensure that New Jersey, 

New York, and all those States affected had the resources and support they needed. On behalf of the people of New Jersey, I thank 

everyone for their leadership and for your recognition that much 

urgent work had to be done. 

I want to especially acknowledge my senior Senator, Senator 

Menendez. He is a true champion of our State, and in the storm, 

as a mayor who unfortunately had a significant impact in loss of 

life, he was truly a champion not only of the whole State but of 

every community that was suffering. 

From day one, you were crisscrossing the State, Senator, surveying damage and shepherding desperately needed Federal resources to New Jersey. Now there is no denying the progress we 

have made. Federal agencies have approved more than $5.67 billion in total Federal assistance in the form of individual assistance 

grants, Small Business Administration (SBA) low-interest loans, 

National Flood Insurance Program (NFIP) payments, and public 

assistance grants. 

In New Jersey, we are resilient, we are determined, and we are 

incredibly resourceful. Our famous boardwalks have once again 

welcomed families and tourists to the Jersey Shore. Cities like Hoboken, Atlantic City, and, of course, Newark are coming back, bustling with activity. And families and business people continue to 

pick up the pieces and move forward. 

Still, far too many are recovering, and it is challenging, and it 

is a daily struggle. From Little Ferry in North Jersey, where we 

were just last week, to Mantoloking on the shore, thousands remain out of their homes, and countless businesses that were 

washed away in the storm have not been reopened. 

In July, I visited Ortley Beach. There were many signs of rebirth 

and renewal, and I ate in some of the restaurants, perhaps too 

many. But I also saw houses that stood like skeletons on the roadside, facades intact but insides gutted. And many of the residents 

I spoke to there on Roosevelt Avenue felt left behind and forgotten 

by Washington. They were still in pain. Many of them had challenges not just with D.C. but also with Trenton. 

I know no one in this room has forgotten those families, but they 

remind us that we have still so much more work to do. 

In New Jersey, we have an estimated gap of about $28.3 billion 

between what is needed for a full recovery and what we are receiving in Federal support. This number considers residential and commercial sector support, reimbursement of municipalities, and critical mitigation activities. Though Congress passed a relief package 

in the aftermath of the storm, billions of dollars in Federal assistance have yet to make their way to families in need. 

One State-run federally funded homeowner assistance package, 

the reconstruction, rehabilitation, elevation, and mitigation grant 

program, provides up to $150,000 to individual families—critical 

dollars to help them rebuild their homes. Until last week, this $600 

million program had yet to make even a single payment. 

The logjam in Federal fundings in my opinion is devastating. Indeed, the delay has literally put lives on hold, entire families up-
5 

rooted from their homes, small businesses still shuttered, retirements postponed, and I have heard directly from many of those affected, painful stories of strong people struggling against still incredible odds, but determined to make it one way or another. 

As I travel across my State, there is understandable concern. 

People ask why did the Hurricane Sandy take so long in the first 

place. They speak of a bureaucratic maze that forces those impacted by the storm to complete reams of what seems to be unnecessary paperwork sometimes just to be considered for Federal aid. 

They detail stringent Federal regulations that leave little to no 

flexibility to local officials who know their communities best. They 

worry of pending hikes in their flood insurance rates as well. 

We must increase our sense of urgency to get funding out the 

door as quickly as possible while still remaining good stewards of 

taxpayer dollars and always protecting against fraud and abuse. 

It is critical that we provide for accessible, sensible grant programs and specifications and to avoid something that has been 

championed by all the people to my right, flood insurance rates, the 

rising of flood insurance rates at a time when it would bring severe 

economic distress to too many families who are recovering after a 

disaster. 

As this Committee knows too well, recovery from a national disaster of this magnitude is a very long process, and it is not easy. 

But as hard as it seems for those here who have been toiling for 

over a year to make this work, we can be sure that it is much harder for the thousands of New Jersey families and business owners. 

They are the ones who are deserving of a helping hand in the wake 

of this terrible storm. 

So my commitment to them is to join with all of you to ensure 

that folks from the Maurice River to Little Ferry to Ortley Beach 

and everywhere in between get the help they certainly need, the 

help they rightfully expect, and the help that they definitely deserve. 

I look forward to working hand in hand with State and local officials, my fellow Senators, and members of the Administration to 

make this recovery period as short, efficient, and successful as possible. 

Thank you. 

Senator BEGICH. Thank you very much. 

I have Senator Menendez next. 

OPENING STATEMENT OF SENATOR MENENDEZ 

Senator MENENDEZ. Well, thank you, Mr. Chairman, and since 

you are going to include our full statement for the record, I am not 

going to go through it all, but there are a couple of points I want 

to highlight, particularly for the Committee’s consideration as it 

moves forward in thinking about future disasters. 

Let me just say I am thrilled to be here with my colleagues from 

New York who were extraordinary in our joint effort to fight for the 

resources for recovery in our area and continue to be that. 

I remember that my late colleague Senator Lautenberg, a Member of the full Committee, was passionate about this issue, and I 

appreciate then-Mayor Booker doing an extraordinary job because 

people think it was only the shore of New Jersey, but cities in New 
6 

Jersey faced tremendous challenges, and he did an extraordinary 

job in responding to the crisis there, and that is when you really 

test the mettle of leadership, and we appreciate his leadership in 

this regard and look forward to having him work with us to continue to recover. 

There are many successes, and I want to commend the Department of Housing and Urban Development (HUD) Secretary as the 

overall chair of this effort, the Transportation Department (DOT), 

FEMA. There are many successes. But there are also challenges. 

Recovery is not yet a reality. Full recovery is not a reality for the 

people of New Jersey. There are many people who are hurting, Mr. 

Chairman, and they continue to languish. There are those for 

which either flood insurance did not exist, or if it existed, did not 

still make them whole. There are those who find themselves in new 

flood zones that mean that the ability to keep their home and what 

they have built a lifetime is now in the crosshairs because of new 

requirements to either raze their homes and/or a variety of other 

issues, as well as the challenges of flood insurance. 

There is a responsibility to ensure that when we give out the taxpayers’ money, even in a disaster, that we do it in a way that ultimately ensures the integrity of that money. But that has to be balanced by the urgency of now. And I appreciate that hopefully part 

of what the task force is doing is looking at how we do this prospectively so that we do not wait for a disaster to figure out what would 

be the appropriate programs that need to be set up in order to respond, because that process in trying to balance the integrity of the 

money with the need and the urgency of now has been somewhat 

of a challenge. And there is still too much money flowing to the 

State that has not quite flowed to the people of New Jersey. We 

need to do a better job of that. 

And the one thing that I do want to take the balance of my time 

to talk about—and I appreciate virtually all of my colleagues sitting here and the Chair having joined us—is the question of not 

the natural disaster that we face bureau the man-made disaster 

that we may have if we do not rectify it, and that is the question 

of flood insurance. The reality is that for thousands of people in 

New Jersey, recovery is an around-the-clock effort, and New Jersey 

families as well as others in the Nation, as we saw by the broad 

bipartisan support we have for the legislation we are promoting, 

have been hit with a triple whammy. They were first flooded by 

Hurricane Sandy, and they lost their homes, their lifetime of effort, 

many of their memories of a lifetime. And then the second is that 

they have to face repair and mitigation costs. And then now, third, 

they are facing astronomical increases in flood insurance costs built 

into the flood reform bill that was passed before Hurricane Sandy 

hit. 

Now, the fact is that the combination of updated flood maps and 

the phaseout of premium subsidies for the National Flood Insurance Program threatens to force victims out of their homes and destroy large segments of communities, if not some smaller communities and entire communities. Homeowners would be forced to pay 

premiums that are several times higher than the current rate. And 

those who cannot afford the higher premiums will either be forced 
7 

to sell or be priced out of their home, which will drive down values, 

property values, and local revenues at the worst possible time. 

So I want to take the opportunity to promote the bipartisan legislation that seeks to take a timeout, that seeks to say, OK, we asked 

FEMA to do an affordability study, they have not had the time and 

the resources to finish it. Well, we should not have premium increases until that affordability study is done and we find an affordability mechanism so that, in fact, we can keep the solvency of the 

program but also create affordability so people do not lose their 

homes and be the victims of a natural disaster. And that, Mr. 

Chairman, I think is one of the most urgent things that sits before 

the Senate that I look forward to your help and the help of my colleagues here to achieve. 

Senator BEGICH. Thank you very much. Senator Gillibrand. 

OPENING STATEMENT OF SENATOR GILLIBRAND 

Senator GILLIBRAND. Thank you, Mr. Chairman. Thank you, 

Ranking Member Paul and Members of the Subcommittee. I also 

want to give a special thanks to Senator Landrieu, who I have 

dubbed the ‘‘third Senator from New York’’ during Hurricane 

Sandy because she was such a vociferous advocate for our families. 

She made sure that we could fix as many things in advance to 

make sure recovery flowed, to make sure all of the logjams she experienced with Hurricane Katrina did not happen in New York and 

New Jersey and other States. She is someone who really understands these programs, what works, what does not work, and I just 

want to thank her for her continued focus on recovery and preventing—and creating resiliency, and her leadership on this really 

is extraordinary, and I just want to thank her. 

I also want to thank Senator Menendez and Senator Schumer 

and Senator Lautenberg, who obviously is not with us. You have 

never seen tougher, stronger champions than my colleagues who 

put themselves in the shoes of every family and advocates for what 

they need most. And I just want to thank them for their leadership. 

I know that Senator Booker will also not only stand in Senator 

Lautenberg’s shoes but be able to be that same strong advocate at 

a time of grave need. He has shown it as mayor. I know you will 

show it as Senator, and I want to welcome you to this fight. 

Obviously the road to recovery is long and hard, but New Yorkers are strong. We rebuild. We rebuild better, we rebuild stronger. 

But the damage was severe. We lost 61 lives. We lost hundreds of 

thousands of small businesses. We lost 300,000 homes, and I remember Senator Landrieu, who suffered far more in loss of life, 

really could not quite conceive of the loss that we suffered in businesses and homes because our population was so dense. And so our 

road to recovery is difficult and different, and the solutions are difficult and different, and I think the work that you are doing is essential for us to meet our goals. 

Now, Congress has worked hard on a couple of problems and 

done a few things that were necessary. We did extend the critical 

deadline to give Hurricane Sandy survivors the time they needed 

to document the losses, which is difficult for a lot of families. We 

did ease regulations that would have prevented substantially dam-
8 

aged homes from accessing recovery funds. We also received assurances from the Army Corps of Engineers (ACE) that they will fund 

the critical shore protection projects at full Federal expense, and 

this is something Senator Schumer was very aggressive on very 

early on, because there were a lot of projects that the Army Corps 

had already designated as necessary that we wanted to make sure 

got funded, and he made sure that was the case. 

But we have to do so much more, and that is exactly what the 

Senators who have already talked have touched upon. We have to 

continue to ensure that the red tape does not get in the way of reimbursements. We need to make sure these communities that have 

been affected can get the financing and the money that they need. 

We have to make sure that homeowners, individual homeowners, 

receive the kind of resources they actually need to rebuild. 

The Senate must pass legislation that we have cosponsored to 

delay the added burden of the disastrous flood insurance premium 

increases. These increases are set to take effect, and no one can afford them. They are unaffordable for nearly every New Yorker that 

I have spoken to, absolutely out of reach. So you cannot have a 

flood insurance program that is too expensive for everyday Americans that need flood insurance. It just does not work. So we must 

do that. When FEMA has completed this study, we can then look 

at it, and Congress can make a plan for how to make the rates affordable. 

Even as the homeowners are rebuilding, they are seeing these 

rates increase. They could force many New Yorkers not to be able 

to rebuild because they will not be able to buy the insurance, so 

they will not get the permitting, and they are out of a home. They 

are homeless. 

As we continue to recover from Hurricane Sandy, we need to 

strengthen the resiliency on future storms. This is not the first and 

it is not the last superstorm. We know this. And as we see storms 

come in more violently, more damaging, more lives lost, we know 

what is to come. So when we rebuild, we have to rebuild for the 

future storm. Every dollar that we invest to strengthen our homes, 

businesses, and infrastructure saves $4 in potential recovery costs 

down the line. 

Early this year, Senator Wicker and I introduced a bill to do this. 

It is called the STRONG Act. We introduced in the Environment 

and Public Works (EPW) Committee. It is a bipartisan bill. It is the 

kind of bill that builds on the progress that Mary Landrieu and 

others have been making on these storm recovery efforts. 

It also is something that engages the local government by requiring the Federal Government to develop national resiliency strategies and to assess where there are gaps and use best practices that 

are being developed around the country. 

We have come a long way in the last year, but as I said, we have 

so much more to be done. When I read reports of how few homeowners have actually been able to rebuild, it breaks your heart. 

New Yorkers want to rebuild. They want to rebuild stronger. But 

they do need Federal help. 

Thank you so much for your dedication. 

Senator BEGICH. Thank you very much. Senator Schumer. 
9 

OPENING STATEMENT OF SENATOR SCHUMER 

Senator SCHUMER. Thank you, Mr. Chairman. First, let me 

thank you for your diligence. You have been a great force in helping us as we have had our troubled times. Senator Landrieu, as 

has been mentioned, has been invaluable. We have learned from 

the mistakes that were made in Hurricane Katrina, and she was 

our guide as we went through this. I want to thank my colleagues 

here. We were a great team and did basically the impossible: getting $60 billion. We were held up for too long a period of time by 

some, but getting that amount of money in programs that are really going to work was one of the accomplishments I think we can 

be proudest of in our legislative careers. And I want to welcome 

Senator Booker. He will fill Frank Lautenberg’s large shoes and be 

a valuable member of our bi-State team. 

I would like to say to at least the five of you, I have worked 

closely in making sure things worked, and you have done a great 

job. You have been exemplary public servants, four at the Federal 

level, one at the city level. And I thank you for that and look forward to continuing working. I look at each of you and can think 

of accomplishments that we have done together in terms of negotiating and getting things done, so thank you to Shaun Donovan, 

John Porcari, Craig Fugate, and Jo-Ellen Darcy. To Cas Holloway, 

you have done a great job as head of the city, and I have not dealt 

with Ms. Tighe because she is oversight. She is supposed to watch 

what we are doing. So keep an eye on us. 

Well, there is so much to say here. First, there is a question everyone asks: How is it going? It is going overall very well. The 

amount of money that has been spent and allocated is large. And 

at least up to now—and let us hope it continues—we have not seen 

a major misspending of money. We want to avoid the scene of trailers being unused, which happened despite Mary Landrieu’s great 

efforts in Louisiana. And then what she warned us of as well, lots 

of money sitting there that could not be used. And so the way we 

structured these programs, particularly the community development block grant (CDBG) but the Army Corps’ programs, the 

Transportation programs, the FEMA programs as well, was to 

make sure that the money would go where it had to go and go 

quickly, but without wasting money. 

And so I know there is a move, all the money should be spent 

in 3 months. If that were happening, there would be still millions 

of people—or thousands of people complaining that they did not get 

what they needed because it would not have been allocated carefully and properly, and there would have been lots of—our newspaper reporters would have been writing about all the misspent 

money. We have not seen that. And so it is taking longer than we 

would like, and it is certainly true that homeowners have not gotten the money that we would have liked to see have gotten more 

quickly. But I believe while the first year was one of laying the 

structure and recovery, making sure the roads were cleared, making sure people had electricity, making sure rents were paid for the 

hundreds of thousands of people who were pushed out of their 

homes, the second year—the first year was recovery, but the second 

is rebuilding, and the money is flowing and flowing well, and flow-
10 

1The prepared statement of Mr. Donovan appears in the Appendix on page 43. 

ing, I think, in a way that it will be better used than in any major 

public disaster in the history of this country. Our homeowners will see $1.4 billion. We told many of them, we 

all did together, lay out the money to rebuild, and you will be repaid. And the combination of the FEMA program, which is fairly 

rigid, and the CDBG program, which is more flexible, will lead to 

that happening. 

Now, it could not happen immediately for a lot of reasons. First, 

people did have to rebuild. Second, we were not going to pay when 

private insurance should step up to the plate, so we had to see how 

much private insurance people were getting. But what we made 

sure of is, if your damage was $100,000 and your FEMA money 

was $10,000 and your private insurance was $40,000 and you had 

a $50,000 gap, that the CDBG money will be there. Good thing. 

Second, we worked really hard to make sure that there were 

mitigation processes put in housing and transportation and in everything else we did. So when we rebuild, we will be much more 

resilient against a future storm, which has been said will happen. 

And we have done that, and that makes a great deal of sense, too. 

So I predict that this second year of Hurricane Sandy recovery 

will be a year when people see lots of rebuilding, and by the end 

of year two, people will be a whole lot happier with the program 

than they are at the end of year one. But it is because of the good 

work that we all did together, the five of us here—Cory, of course, 

doing his work in Newark. The five of us here at the Federal level 

and those of you back there, it has been a strong team effort that 

I believe will be regarded as one of the most successful efforts in 

terms of getting a large area to recover from a powerful, horrible 

storm as well and as quickly as possible. 

Senator BEGICH. Thank you very much, Senator Schumer. 

What I would like to do is go through the panel, and I am sure 

many of us will have questions, but, again, we want to thank you 

for being here. Thank you for your work on a daily basis on the 

disasters that we are faced with across the country. 

The first one we have to speak is Secretary of HUD, Secretary 

Donovan, who has served in the position since 2009. Thank you for 

coming to Alaska as you have done before. Prior to work in the Administration, he served as Commissioner in the New York City Department of Housing Preservation and Development, so I know you 

have a personal concern about what happens in New York. So let 

me turn it over to Secretary Donovan. 

TESTIMONY OF THE HON. SHAUN DONOVAN,1 SECRETARY, U.S. 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Secretary DONOVAN. Chairman Begich, Senators Landrieu, Schumer, Menendez, Gillibrand, and Booker, it is a great pleasure to be 

joining you today, and I want to begin by remembering that last 

week on the 1-year anniversary of Hurricane Sandy, our Nation 

paused to remember all those who lost their homes, their businesses, and, most tragically, lost their lives. 

I remember visiting the region soon after the storm struck and being stunned by the breadth of destruction: $65 billion in damage 
11 

and economic losses, 650,000 homes damaged or destroyed, 9 million people lost power. It was clear that the road to recovery would 

be long and difficult. But if you know anything about the people 

from this region—and I am proud to count myself as one of them— 

it is that they are resilient. They may get knocked down, but they 

always get back up. 

After Hurricane Sandy, they began the work of putting their 

lives and communities back together, and President Obama quickly 

pledged his support of these local efforts in order to ensure a full 

recovery. So he created the Hurricane Sandy Rebuilding Task 

Force to maximize Cabinet-level coordination in support of the 

work to rebuild this region. I have been enormously proud to chair 

this effort as we work to achieve two basic goals: one, to get the 

assistance that you all fought so hard to make a reality to communities as quickly as possible, to meet the immediate needs; and, 

second, to ensure that the region rebuilds stronger and smarter 

than before so that it is better equipped to deal with future storms. 

Let me begin with the work of getting assistance to communities 

quickly and effectively. As you know, in January President Obama, 

working with all of you in the Congress, State and local leaders, 

fought tirelessly to get $50 billion in Hurricane Sandy supplemental funding in order to aid victims of the storm. And ever since, 

it has been a priority of the Administration to get these dollars into 

communities as quickly and responsibly as possible. That is why 

we thought it was critical to include several measures in the supplemental that facilitated more efficient spending of these dollars, 

and I want to particularly call out Senator Landrieu for all her 

help and assistance on this. A few examples: 

Giving HUD the authority to reduce duplicative environmental 

reviews. As a result of these and other measures, we made great 

progress on a number of fronts. More than 230,000 people and 

small businesses have received direct assistance from FEMA, the 

Small Business Administration, the Department of Labor (DOL); 

more than 99 percent of Hurricane Sandy-related National Flood 

Insurance policy claims totaling more than $8 billion have been 

paid out to roughly 143,000 policy holders who filed claims; 97 percent of public beaches in the affected region were open by Memorial 

Day 2013, sending a strong message that the shore was ready for 

business. And when you include the National Flood Insurance Program, the Administration has allocated nearly $40 billion in funding for recipients with roughly $13.5 billion of this already paid 

out. 

HUD in particular has allocated $10 billion in community development block grants, including an allocation that took place within 

8 days of the signing of the Hurricane Sandy supplemental into 

law. This represented the fastest ever allocation following the signing of an appropriations bill. 

So relief is getting to communities, but as you have all said, we 

know it can never be fast enough. That is why we have been creative in finding ways to work with local partners to expedite the 

rebuilding process. This includes the Small Business Administration’s work to accelerate application processing times, which has 

fallen from 61 days during Hurricane Katrina to 42 days during 

Hurricane Sandy, a drop of about one-third. 
12 

The use of a streamlined permitting and review process for complex large infrastructure projects that is based on a model which 

has reduced implementation times by 50 percent. Just one example, cutting 3 to 5 years off of projects like the Tappan Zee Bridge. 

The alignment of the Federal Housing Administration (FHA) and 

the Federal Housing Finance Agency (FHFA) for closure prevention 

policies in disaster-affected areas, making it easier for homeowners 

to get the help they need to stay in their homes at such a critical 

time in their lives. 

And the establishment of a uniform minimum flood risk reduction standard across the Federal Government for major Hurricane 

Sandy rebuilding projects in floodplains, representing the first time 

a Federal Governmentwide standard has been set that accounts for 

the effects of rising sea levels. 

And moving forward, we will continue to look for new ways to remove unnecessary barriers and headaches, ensuring that the billions that flow into the region are put into use as quickly and efficiently as possible. 

This complements our other goal: rebuilding stronger and smarter so that the region is better prepared to withstand future storms. 

On August 19, the task force released our rebuilding strategy for 

the region, which included 69 recommendations to do just that. It 

included steps to harden our power grid and our fuel supply chain, 

to address the sustained outages in gas lines we saw during Hurricane Sandy, and steps to help families and small businesses rebuild in these new times. 

The strategy also identifies ways to leverage additional private 

funds to support infrastructure projects. Investing in projects that 

will make our communities more resilient is vital to their safety. 

It is also good for our economy. As Senator Gillibrand pointed out, 

we know that for every dollar we spend, we save $4 in avoided 

costs in future storms. 

Every recommendation in this strategy has a detailed implementation plan, and I and my Department will be accountable to the 

region, to you, to see them through. And we will stay at it for as 

long as it takes, knowing that eventually we will emerge stronger 

and more vibrant than ever. 

As I mentioned earlier, following Hurricane Sandy it was clear 

that the road to recovery would be long and difficult. A year later, 

I am proud to say we have made significant progress. Families 

have gotten back on their feet, businesses have reopened, communities are turning the page and looking toward the future with new 

hope. But we all know that much more work needs to be done, and 

all of us in the Obama Administration are committed to working 

with local partners and with all of you to continue to get assistance 

to those in the process of rebuilding, ensure the region is better 

prepared to withstand future extreme weather events, and work to 

improve our recovery efforts across the Nation. 

These are our goals I look forward to working with this Committee on, and I look forward to answering your questions today. 

Thank you. 

Senator BEGICH. Thank you very much. 

The next person I have on the list, Mr. John Porcari, has served 

as the Deputy Secretary of DOT since 2009. Before becoming the 
13 

1The prepared statement of Mr. Porcari appears in the Appendix on page 50. 

Deputy Secretary, he had served twice as the Secretary of the 

Maryland Department of Transportation. 

Thank you very much for being here. 

TESTIMONY OF THE HON. JOHN PORCARI,1 DEPUTY 

SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. PORCARI. Thank you, Chairman Begich and Members of the 

Subcommittee. It is a pleasure to be here today to highlight the Department of Transportation’s role in assisting the communities that 

were devastated by Hurricane Sandy just a year ago. 

When the hurricane hit, the damage it caused did not just take 

a tragic human toll; it also dealt a devastating blow to the regional 

transportation system, which is the lifeblood of the region’s economy. On the aviation side, three of the busiest airports in the country and 19,000 flights were affected. The highway system as well 

suffered significant damage. But what stands apart is this historic 

storm triggered the worst public transit natural disaster in the history of the United States. 

In response to this disaster, Congress passed the Disaster Relief 

Appropriations Act, which included $12.4 billion in assistance for 

transportation programs. It is worth noting that the assistance was 

reduced by $650 million due to sequestration. More than $10 billion of this went to fund the Federal Transit Administration’s 

(FTA) new Public Transportation Emergency Relief Program, which 

had been proposed by President Obama back in 2011 and was later 

authorized by our transportation bill, MAP–21. This emergency relief (ER) program for transit was in place for about 30 days before 

the disaster hit. 

In addition to helping transit agencies make immediate repairs, 

the ER program also supports mitigation activities that will improve resiliency and help transit infrastructure resist similar 

storms in the future. 

Disaster relief appropriations funding also went to fix the rest of 

the transportation network as well: roads and bridges, restore Amtrak service, and as I mentioned, repair airport facilities at Newark, LaGuardia, and John F. Kennedy International Airport (JFK). 

To date, the Department of Transportation has allocated nearly $7 

billion for repairs and resiliency efforts in response to Hurricane 

Sandy. 

We have learned a lot from the hurricane experience that will 

help us respond to future events. 

First, a coordinated and efficient Federal response is essential. 

President Obama’s Hurricane Sandy Rebuilding Task Force has 

helped all the Federal agencies involved work together to deliver 

the best possible outcomes for the communities affected by the 

storm. Secretary Donovan’s leadership has been important in moving forward. 

Second, Hurricane Sandy and other recent disasters underscore 

the Nation’s vulnerability to extreme weather events under current 

climate conditions. That is why one of our top priorities moving forward is to better protect existing transportation infrastructure and 

equipment from the impact of future natural disasters. It just 
14 

1The prepared statement of Mr. Fugate appears in the Appendix on page 58. 

makes sense. If we are going to spend money rebuilding transportation, let us build it to last. 

We will soon be issuing a Notice of Funding Availability for capital projects that will reduce the risk of damage of from future disasters in the region impacted by Hurricane Sandy. We are going 

to do that on a competitive basis. We believe these investments in 

resiliency will help reduce the need for any future recovery efforts. 

And as has been previously pointed out, research has shown that 

every dollar spent by FEMA on actions to reduce disaster losses 

now saves the Nation almost $4 in avoided impacts. We are hoping 

to realize similar cost savings for the American taxpayer by ensuring that our transportation infrastructure is built to withstand future storms. 

However, I must caution the need for resilience investments far 

exceeds the available funding. The FTA has only emergency relief 

funds available for Hurricane Sandy recovery efforts and nothing 

nationwide beyond that. That leaves us without any ability at the 

Department to address our next crisis, including future emergencies occurring outside this region. 

Much of my own career has been at the State and local level, and 

I know firsthand how important it is to respond quickly and effectively. I strongly encourage Congress to appropriate funds so that 

when the next disaster strikes and takes public transportation systems offline, we will be in a position to respond immediately. 

I thank the Subcommittee for inviting me to testify. I would be 

happy to answer any questions. Thank you. 

Senator BEGICH. Thank you very much. 

The next speaker is Mr. Craig Fugate, who was confirmed for the 

FEMA Administrator in 2009 after serving as the Director of the 

Florida Division of Emergency Management. In 2004, he managed 

the largest Federal disaster reason in Florida history as four major 

hurricanes impacted the State in quick succession. 

Thank you very much. Good to see you again. 

TESTIMONY OF THE HON. W. CRAIG FUGATE,1 ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY, 

U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. FUGATE. Thank you, Mr. Chairman and Senator. Secretary 

Donovan laid out a lot of the numbers, so I want to come back to 

what you have done to set the stage for what we were able to do 

as a Federal Government and then our next steps. 

I am going to start with something that you are not hearing a 

lot about but I think it is important we talk about, and that has 

been the continued support and funding from Congress to State 

and local governments through homeland security grants and 

emergency management preparedness grants, building the capability at the State and local level to manage the initial impacts of 

these types of disasters. Without that, the Federal Government 

could not have done its job if our State and local partners were not 

able to do theirs. So this is one thanks for the investment over 

time, specifically since 9/11. Those investments are paying off in in-
15 

creased capability and resiliency our communities have against all 

hazards. 

The second piece was we would not have been prepared to respond as FEMA without the Post Katrina Emergency Management 

Reform Act (PKEMRA), and I doubt very much I would be here testifying, because that law substantially changed what FEMA’s mission was, requirements of the person that is chosen to lead the organization, as well as the tools required to not wait until States are 

overwhelmed before the Federal Government can mobilize. This 

put us in the position under the President’s leadership to move resources and supplies before any State was hit by this storm, before 

we knew how devastating this was going to be. Again, those tools 

set the stage for the response and support of State and local government. 

We oftentimes talk about the money and the supplemental, 

which overshadows something I think is very fundamental, a 

change to the Stafford Act. The Sandy Recovery Improvement Act 

addressed many of the issues that we still had that became impediments to recovery. Probably one my best examples was in debris 

management. We were actually increasing the cost of removing debris because we had rules and policies that said if you use your 

folks and your Public Works Department to pick up debris, we are 

not going to reimburse you for those costs, only their overtime. But 

if you hire a contractor to do that, we will pay you the full cost 

share on that. And it was these tools that we began to implement. 

We have used them in disasters post. These were not Hurricane 

Sandy specific, but Hurricane Sandy certainly became the catalyst 

of how we would be better stewards of getting money out effectively 

to empower local and State governments to rebuild faster without 

losing the ability to maintain the fiduciary responsibility of ensuring that the dollars go toward the things they were intended to go. 

We have used these not only now in Hurricane Sandy, but some 

of these we were allowed to go to previous disasters, where we 

have been able to use cost-estimating tools in Vermont to do a big 

challenging project there. We have been able to do some things 

that quite honestly they always made sense, but you gave us the 

tools. Although it was only a few tribes impacted and this came 

after Hurricane Sandy, I think for our sovereign federally recognized tribes, also something that was very unheard of is you finally 

gave federally recognized tribal governments the recognition of the 

sovereignty that no longer requires them to go through a State to 

request declarations. We implemented that program after the law 

was signed. In fact, the first tribal government that came in was 

the Eastern Band of the Cherokee Indians. We did not wait for the 

rules to catch up. We did not wait for our procedures to catch up. 

We fully implemented the law as you intended, and we have now 

successfully executed disaster declarations at the request of tribal 

governments. 

We have a lot of work to do. We tend to look at one-year marks, 

but I knew going in that this was going to be a multi-year recovery. 

I think Senator Schumer said it right, that the first year is oftentimes those initial steps where you see a lot of progress in the beginning, and then it starts to slow down because now we are starting to move into rebuilding. From the President’s direction on 
16 

1The prepared statement of Ms. Darcy appears in the Appendix on page 73. 

down, we want to make sure is we rebuild for the future and not 

the past. 

We know that we can make these improvements and make investments that may cost a little bit more on the front end, but we 

can assure the delivery of critical services and infrastructure in the 

future. 

Last, Senator Martinez, again, we agree. The Administration’s 

position on the reauthorization of the Flood Insurance Program, we 

need to have affordability. But we found that in the legislation 

passed we did not have the tools to allow us to build in affordability before the increases took place. We look forward to working 

with Congress to get a tool that allows us not to keep kicking the 

can down the road but address affordability for people that live in 

their homes. We also want to ensure we are not building back the 

same way, putting people in future generations at risk. 

Thank you. 

Senator MENENDEZ. Mr. Chairman. 

Senator BEGICH. Yes? 

Senator MENENDEZ. Martinez was my former colleague from 

Florida, but—— [Laughter.] 

Mr. FUGATE. Sorry, Senator Menendez. 

Senator BEGICH. It was a Freudian slip. 

Senator MENENDEZ. We are both Cuban, but we do not all look 

the same. 

Mr. FUGATE. Sorry. 

Senator BEGICH. Great. Thank you very much. And let me also 

say that I really appreciate the work you did with the tribes. That 

is a huge opportunity, so thank you for that. 

The next person I have is Ms. Jo-Ellen Darcy who is the Assistant Secretary of the Army (Civil Works), which has primary supervision over the U.S. Army Corps of Engineers. Prior to her appointment, Ms. Darcy served as the senior environmental adviser to the 

Senate Finance Committee responsible for environment, conservation, and energy issues. 

Good to see you again. Thank you. 

TESTIMONY OF THE HON. JO-ELLEN DARCY,1 ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS), U.S. DEPARTMENT OF 

ARMY 

Ms. DARCY. Thank you, Senator Begich, and thank you for the 

opportunity today to testify on the Corps’ continued work on the recovery from Hurricane Sandy. 

Federal support during the response to Hurricane Sandy was unprecedented. The Corps was part of an interagency team to include 

State and local governments which provided technical assistance 

and rapid response activities across the impacted areas. The Disaster Relief Appropriations Act of 2013 provided the Corps with 

$5.35 billion to address damages caused by Hurricane Sandy. This 

money is being used to reduce future flood risk and increase the 

long-term sustainability of the coastal ecosystem and communities 

while reducing the economic costs and risks associated with large 

floods and storms. 
17 

The Corps has made significant progress in the year since Hurricane Sandy and in the time since the passage of the appropriations 

bill. 

The Corps’ Hurricane Sandy recovery program has three major 

components: First, it is our near-term component that supports 

emergency operations and repair and restoration of previously constructed Corps projects along the coastline, dredging of Federal 

navigation channels and repair of Corps-operated structures; second, an investigations component that expedites the completion of 

ongoing studies at full Federal expense and funds the North Atlantic Coast Comprehensive Study; third, our construction component 

rehabilitates, repairs, and constructs projects to reduce future flood 

and storm damage risk in smarter and more sustainable ways. 

As part of the near-term component, the Corps started beach repair and restoration of existing projects along the Atlantic coast in 

February 2013 and is scheduled to conclude these actions by the 

fall of 2014. To date, the Corps has placed approximately 12 million 

cubic yards of sand to repair dunes and berms and will continue 

work to restore them to their original design conditions. Also, the 

Corps has obligated almost $390 million to restore damaged 

projects. Of the total 33 projects in this phase, 7 are completely restored, 22 have awarded construction contracts, and 4 are in the 

design or the pre-award stage. 

Near-term efforts also include addressing the storm’s impacts to 

our navigation infrastructure. The Corps’ operations and maintenance work began in February 2013, and most projects are scheduled for completion by the spring of 2015. By the end of fiscal year 

(FY) 2013, the Corps had obligated over $160 million for this work 

with 35 projects completed and 28 in construction. 

For the investigations component, the Corps is using funding to 

expedite completion of 18 flood and storm damage reduction studies 

in the Northeast that were underway when Hurricane Sandy occurred. Twenty million dollars of the investigations funding is for 

the Comprehensive Study, which will assess 31,000 miles of the 

North Atlantic coastline, bringing together experts in coastal planning, engineering, and science from more than 90 governmental, 

academic, and nongovernmental entities. The Comprehensive 

Study team has developed a draft framework that is currently 

under review, and the results of the study we think will inform our 

future planning efforts. 

The Corps was also directed to conduct a Performance Evaluation Study to evaluate the effectiveness of completed Corps projects 

during Hurricane Sandy and to include summary recommendations 

for future improvements. I signed the transmittal of this report 

this morning, so it should be here on the Hill by now. 

The third component of the program will construct projects that 

were previously authorized but not constructed at the time of Hurricane Sandy’s landfall, potential projects identified for implementation following the investigation process, and projects that will fall 

within our Continuing Authorities Program (CAP). Planning, design, and expedited reevaluations are underway for the 18 previously authorized but not yet constructed projects, the Corps anticipates construction will begin in early 2014. 
18 

1The prepared statement of Ms. Tighe appears in the Appendix on page 79. 

The Corps expects to complete construction work on roughly half 

of these flood risk reduction projects by mid-2015. Of the identified 

Continuing Authority Projects, Massachusetts, Connecticut, New 

York, New Jersey, Delaware, Maryland, and Virginia are currently 

scheduled to receive beach erosion and coastal storm damage risk 

reduction projects, and we expect 70 percent of this work to be 

completed by 2016. 

There will always be a residual risk for Americans who live in 

coastal regions. Expected changes in sea level rise, extreme weather, and other impacts due to climate change are likely to increase 

the risks facing these areas. Together with the National Oceanic 

and Atmospheric Administration (NOAA) and FEMA, the Corps of 

Engineers has developed a sea level rise tool to help communities 

anticipate the implements of sea level rise. We will use base flood 

elevation maps from FEMA, the coastal mapping capabilities of 

NOAA, and a sea level rise calculator from the Corps of Engineers. 

This tool yesterday was recognized by the President and was 

awarded the Green Government Climate Change Champion Award. 

So the collaboration between our agencies as a result of Hurricane 

Sandy has already produced a future-looking sustainability tool 

that we can all use throughout the Federal Government. 

In addition, NOAA and the Corps of Engineers are working together to help rebuild more resilient and sustainable coastal communities. While working on post Hurricane Sandy recovery efforts 

in New York and New Jersey, NOAA and the Corps jointly developed a set of infrastructure systems rebuilding principles in order 

to promote a unified strategy for activities in restoring the coast. 

Collaborative efforts on all levels continue to explore and implement solutions that reduce risk from coastal storms, such as appropriate land use planning, non-structural solutions, and well-communicated evacuation planning. 

Mr. Chairman and Members of the Committee, I thank you for 

the opportunity and look forward to any questions. 

Senator BEGICH. Thank you very much. 

Our next speaker is Ms. Kathleen Tighe currently serves as the 

Chair of the Recovery Accountability and Transparency Board 

while continuing her position as Inspector General (IG) for the Department of Education. The Board has been charged with tracking 

Federal dollars being spent on the Hurricane Sandy recovery. 

Thank you for being here. 

TESTIMONY OF THE HON. KATHLEEN S. TIGHE,1 CHAIR, 

RECOVERY ACCOUNTABILITY AND TRANSPARENCY BOARD 

Ms. TIGHE. Thank you very much. Mr. Chairman, Senators, I 

want to thank you for the opportunity to appear before you today. 

As Chair of the Recovery Board, I will be speaking to you about 

the Board’s role in the oversight of funds expended in support of 

Hurricane Sandy recovery efforts. 

The Board was created in February 2009 as part of the Recovery 

Act. It consists of 12 Inspectors General, and its mission is to provide transparency of the use of recovery funds and to prevent and 

detect fraud, waste, and abuse. We meet this mission by managing 
19 

the FederalReporting.gov website through which recipients of recovery funds report and by displaying that spending information in 

unique ways on our public website, Recovery.gov. We also developed the Recovery Operations Center (ROC), as a central data analytics service to support fraud detection and prevention. The ROC 

has the ability to rapidly aggregate and analyze large, complex volumes of data, to screen for potential risks or identify targets, and 

provide deeper investigative information in the support of audits, 

investigations, and prosecutions. 

While the Board was originally due to sunset on September 30 

of this year, the Hurricane Sandy legislation extended the Board 

through September 2015, with additional duties for the Board to 

develop and use our resources and oversight mechanisms to detect 

and remediate fraud, waste, and abuse of funds related to Hurricane Sandy. 

Our oversight efforts related to Hurricane Sandy have focused on 

applying the techniques and processes developed by the ROC to examine the spending, primarily working with our IG partners. In coordination with the Department of Homeland Security Office (DHS) 

of Inspector General, we conducted a review of 104 entities that received Hurricane Sandy debris removal contracts from 32 cities in 

New York and New Jersey totaling over $329 million. Among the 

particular risk indicators we reported to DHS the Office of Inspector General (OIG) were firms whose owners had Federal and State 

tax liens, one that had previously been listed on the Federal list 

of suspended or debarred bidders, and companies that had filed for 

Chapter 7 bankruptcy and had Federal tax liens. 

In addition to this work, we have provided assistance to DHS 

OIG on its investigations of other FEMA Hurricane Sandy public 

assistance grants and to other OIGs in their Hurricane Sandy 

work. For the State of Rhode Island, we undertook a proactive 

analysis of 10,000 potential Hurricane Sandy contractors against 

our databases that would show potential risks and reported information back to that State. 

In addition to our work in the ROC, we are using our website, 

FederalTransparency.gov, to attempt to collectively display what 

information is available on Hurricane Sandy spending. We visually 

display Hurricane Sandy-awarded contracts from the Federal Procurement Data System and agency award information, as well as 

links to FEMA spending by State and State Hurricane Sandy 

websites. We also display the Department of Justice’s (DOJ) disaster fraud reporting hotline. 

We are currently in the final stages of moving the Hurricane 

Sandy information to our Recovery.gov website to be able to better 

use the functionalities of that website. 

Since commencing our work on our Hurricane Sandy mission, we 

have identified a series of challenges that we continue to face. The 

first is obtaining accurate and complete Hurricane Sandy spending 

data. With no mandated centralized reporting, such as we had in 

Recovery, access to standardized data is limited. While the Federal 

Procurement Data System and USASpending have information related to Hurricane Sandy, each has its limitations. 
20 

1The prepared statement of Mr. Holloway appears in the Appendix on page 88. 

For example, on USASpending, Hurricane Sandy grants and 

loans lack a unique identifier, making it problematic to accurately 

extract and analyze Hurricane Sandy awards. 

In addition, the lack of sub-recipient data will further complicate 

our work. Given the types of Hurricane Sandy grants expected to 

be awarded, prime recipients of these awards oftentimes will be a 

State or a municipality, but historically, the majority of fraud occurs below this level by entities performing the actual work. 

That concludes my testimony. Thank you for the opportunity to 

discuss the activities of the Board, and I look forward to answering 

any questions. 

Senator BEGICH. Thank you very much. 

For our last speaker, again, I want to thank you for being here. 

Before I mention you and your title, I want to make sure that folks 

know for the record we did invite representatives of both the New 

York State and New Jersey State governments. They declined the 

invitation to testify today, so we are happy that a local government 

person is here, Cas, and I appreciate that. As the Deputy Mayor 

for Operations oversees a number of offices, including the police department, fire department, and Office of Emergency Management. 

And I was going to say Mayor Michael Bloomberg, but you had an 

election last night so I am not sure what it is today, but we are 

glad you are here, and we appreciate it, especially from a local perspective, so please. 

TESTIMONY OF CASWELL F. HOLLOWAY,1 DEPUTY MAYOR FOR 

OPERATIONS, CITY OF NEW YORK 

Mr. HOLLOWAY. Thank you very much, Mr. Chairman, and just 

for clarification, the inauguration is January 1, so I still have my 

job for the next 55 days. [Laughter.] 

Senator BEGICH. Good. 

Mr. HOLLOWAY. And so does the mayor. 

Senator BEGICH. OK. Very good. 

Mr. HOLLOWAY. Good afternoon, Mr. Chairman and Senators. 

Thank you for being here. Thanks for the opportunity to testify 

about the role and effectiveness of Federal aid to New York City’s 

recovery from Hurricane Sandy. 

I want to begin by thanking you on behalf of Mayor Bloomberg 

and all New Yorkers for answering New York City’s call after the 

unprecedented devastation caused by Hurricane Sandy. From 

President Obama and members of his Cabinet, including Secretary 

Donovan who is here today; to entire agencies of the Federal Government, particularly FEMA, HUD, and the Army Corps of Engineers; to assets including generators, fuel, food, and many others; 

to the billions of dollars in recovery aid that Congress made available through the Disaster Relief Appropriations Act of 2013, what 

I will refer to as ‘‘the Sandy recovery bill,’’ the Federal Government 

has been there for New York City since well before Hurricane 

Sandy made landfall on the New Jersey coast last October 29. 

Hurricane Sandy was the worst natural disaster ever to strike 

New York City. It took the lives of 44 New Yorkers, caused unprecedented damage to public infrastructure and private property, and 
21 

triggered an enormous and ongoing public and private response. I 

will touch briefly on the role of Federal aid in three specific components of the city’s recovery: before and up to 5 months after the 

storm; the second-stage housing recovery efforts that are underway 

now and will continue for the next 12 to 18 months; and the city’s 

long-term plan to protect and mitigate against the climate-related 

impacts that have become an increasingly frequent part of everyday life. 

I will start with the pre-and immediate after Hurricane Sandy 

aid. 

Our partnership with Federal agencies began well before Hurricane Sandy moved up the east coast of the United States and took 

that leftward hook that would subject New York City to the storm’s 

most devastating impacts. As the city implemented its Coastal 

Storm Plan, FEMA and the National Weather Service (NWS) were 

embedded with us at the city’s Emergency Operations Center, and 

I was there for days, so I can attest we had much support. Although the storm did tremendous damage, the pre-storm evacuation operation was largely successful, and post-storm surveys indicate that most New Yorkers knew about the storm, knew if they 

lived in a vulnerable area, and knew they should evacuate if they 

lived in an evacuation zone. 

After the storm, together with FEMA and the New York National 

Guard, we removed an estimated 700,000 tons of storm debris 

through some of the contracts that Ms. Tighe just mentioned; 

fueled more than 25,000 emergency and essential vehicles through 

a partnership with the National Parks and the Defense Logistics 

Agency (DLA); distributed more than 2.1 million Meals Ready to 

Eat and canvassed more than 100,000 households in affected areas 

to distribute food and water, sanitary items, and to make referrals 

to health care and case management services. 

As we reported to you when Congress took up the Sandy Recov- ery Act, the city suffered and estimated $19.5 billion in damages 

due to the storm, including nearly $5 billion in direct recovery 

costs. Hundreds of homes were totally destroyed; thousands of families were displaced. Given the unique density of New York City 

and the challenge of relocating thousands of families, Mayor 

Bloomberg made it a priority to get people back into their homes. 

Thanks to the creativity of Craig Fugate and his team at FEMA, 

we developed what FEMA called the Shelter and Temporary Essential Power program (STEP). In New York City, we call it ‘‘Rapid 

Repairs.’’ Rapid Repairs was a truly innovative approach to temporary emergency shelter that is based on a simple premise: The 

best temporary shelter is permanent shelter. STEP enabled the city 

to hire contractors to make emergency heat, hot water, and power 

repairs to victims’ own homes. In only 110 days since we went into 

the first home on November 21, the city was able to complete repairs on 11,800 homes and multi-family buildings. That enabled 

roughly 54,000 New Yorkers to return to their homes. And our survey data indicates that most people, the vast majority, are back in 

their homes in New York City, although many still need to recover, 

have additional recovery to do. 

I note that all Federal dollars have been accounted for, and we 

want to make sure that they are properly spent. It has been a pri-
22 

ority for New York City since the beginning, and we have established monitoring programs overseen by the city’s Department of 

Investigation for each of the housing initiatives we have undertaken. We will continue this rigorous oversight, and we can provide 

reporting at any level that the Committee would like. 

While Rapid Repairs helped thousands of New Yorkers to move 

back into their homes, that was just the beginning. Thousands of 

families need much more work to be done to make a full recovery 

and make their homes better able to withstand severe storms and 

other climate impacts. Thanks to $16 billion, unfortunately, due to 

sequestration—of community development block grant funding 

under the Sandy Recovery Act, and the leadership of Shaun Donovan and the Federal Recovery Task Force, we launched ‘‘Build It 

Back,’’ a $700 million program, in June with the city’s first allocation of CDBG funding, and the basic idea is to help homeowners 

continue that recovery. 

As of October 31, nearly 26,000 families have signed up for the 

program, and approximately 500 of those had homes that were destroyed. We have encouraged many New Yorkers to seek this help, 

and we are glad that they have done so. Of course, the overall need 

and demand does exceed supply, so we will need additional allocations to make sure that the neediest get funding and support first. 

We have prioritized by income level and those who are the most 

damaged. 

We estimate that between 55 and 60 percent of all of these applicants are in our first priority group, and we are focusing on them. 

Right now we are actually working, and we have 8,000 people who 

are going through insurance verification processes, Tier 2 environmental assessments, and Secretary Donovan has been very helpful 

in trying to streamline those processes so that we can take advantage of all the work the Federal Government has done. 

At the homeowner and building level, perhaps the greatest remaining challenge for New Yorkers is the affordability of flood insurance. Members of this Committee are well aware of it. The city 

commissioned an independent study that shows that only 35 percent of property owners in the floodplain who were required to 

have flood insurance actually had it. Premiums could go up for the 

new FEMA maps that are going to be coming out from an average 

of $430 a year to $5,000 to $10,000 a year, so we are encouraged 

by the legislation that is working its way through to delay until affordability can be addressed in a real way. 

Of course, the greatest long-term challenge we face is protecting 

New Yorkers over the long term. At the same time that we were 

getting families back into their homes and repairing the city’s infrastructure, the mayor commissioned study of the likely impacts 

that New York City will face between now and the 2050s. The result is this plan, ‘‘A Stronger, More Resilient New York.’’ I brought 

some extra copies for the Committee, and you can get it on our 

website at NYC.gov. It has 257 separate initiatives to protect New 

York City’s 520 miles of coastline, as well as critical infrastructure 

and service networks over the long term. Hurricane Sandy took out 

huge segments of the power grid, 95 percent of the telecommunications network in lower Manhattan. It took out Hospital Row on 

First Avenue, closing down hospitals around the city. This plan is 
23 

an achievable, affordable way to mitigate most of these impacts 

when the next big storm or other climate event, whether it is a 

flood, downpours, or drought, hits New York City. And we are on 

track to complete 43 critical milestones before the end of the year. 

The Army Corps of Engineers is also one of our most important 

partners in this effort. We estimate that more than 1.5 million 

cubic yards of sand were lost during Hurricane Sandy; 600,000 

cubic yards have been put back; 3 million more cubic yards are on 

the way. And I have to say, having worked with the Army Corps 

for the last 7 years, the work that they are doing on the beach 

right now is the fastest I have ever seen them operate, without exception. 

Senator BEGICH. Can I have you summarize? Because you are little over the limit, and I want—— 

Mr. HOLLOWAY. Yes. Sorry about that. 

Senator BEGICH. But do not worry. Your statement will also be 

included in the record. 

Mr. HOLLOWAY. Great. Finally, I just want to note, New York 

City cannot do all of this recovery alone. There are many areas 

over which we have little or on control: the power grid, telecommunications, and other critical networks. And so we want to 

work with Congress, with additional allocations that we will get to 

make sure that we can implement this plan. Clearly we have a 

long way to go, and we will need additional allocations. But if the 

support we have received from Congress and the Federal Government so far is any indication, I am confident we will be able to 

meet those needs and better prepare New York for whatever climate challenges come next. And I am happy to answer any questions. 

Senator BEGICH. Fantastic. Thank you very much. 

What I would like to do is go to the Ranking Member, and then 

I will come back to me, and then I will go down to the other two 

Members that are here. Senator Paul. 

Senator PAUL. Thank you, and thank you for coming today. I 

grew up in Texas on the Gulf Coast, so I know a lot about hurricanes from personal experience, but we appreciate all of you trying 

to help in the aftermath of the terrible hurricane. 

A question for Secretary Donovan. Do you think that Hurricane 

Sandy relief funds ought to be spent on TV ads? 

Secretary DONOVAN. I assume what you are referring to, Senator, 

is that there has been an effort in a number of States, not just in 

Hurricane Sandy but historically as well, in many prior storms to 

encourage economic development. And we did see a small amount 

of CDBG money that was used for an economic development campaign to encourage people back to the beaches. The evidence—— 

Senator PAUL. Do you think it is a good idea or a bad idea 

that—— 

Secretary DONOVAN. The evidence—— 

Senator PAUL [continuing]. We spend Hurricane Sandy relief 

funds on TV ads? 

Secretary DONOVAN. The evidence that we have seen is that 

those campaigns are effective in growing economic development in 

those areas, and, therefore, they actually reduce the cost of recovery to the Federal Government. 
24 

Senator PAUL. I do not think we need to argue about whether 

ads work. Ads work. But do you think ads for Hurricane Sandy relief should be spent on TV ads? Yes or No. I mean, good idea? Bad 

idea? 

Secretary DONOVAN. As I said, we looked at the evidence, and we 

have seen that encourages economic development. What I would 

say is—— 

Senator PAUL. My understanding is that you all gave—— 

Secretary DONOVAN [continuing]. That community development—— 

Senator PAUL. You all had to give a waiver to do—— 

Secretary DONOVAN. Senator, if I could just—— 

Senator BEGICH. Go ahead. 

Secretary DONOVAN. The community development block grant is 

a very flexible program. This is clearly within the legal boundaries 

of what Congress has determined the program can be used for, and 

it was demonstrated to us that this could be an effective tool and 

actually lower the cost to the Federal Government. 

Senator PAUL. It gives a little bit of a black eye to something 

that maybe a lot of it is going to a good purpose. But I would say 

that if I were in your position, I would have said no, we are not 

going to spend ads. 

Here is another problem. Some of these ads, people running for 

office put their mug all over these ads while they are in the middle 

of a political campaign. In New Jersey, $25 million was spent on 

ads that included somebody running for political office. You think 

there might be a conflict of interest there? That is a real problem, 

and that is why when people who are trying to do good and trying 

to use taxpayers’ money wisely, they are offended to see our money 

spent on political ads. That is just offensive. 

In New York you actually have a rule. They are not allowed to 

do it. So New York did the same thing, which I still object, but at 

least they did not put someone’s face on the ad, and their family, 

and it looks like a bio ad. I think, oh, yes, come to New Jersey, but 

it is, like, I do not want to pay for ads for someone’s advertising 

out of the Hurricane Sandy relief fund. It gives the whole thing a 

black eye. 

But it is not just Hurricane Sandy relief funds. We spent $684 

million advertising for Obamacare. Well, it is a fairly contentious 

issue that was very partisan and passed by one party. Should we 

then get to spend taxpayer money advertising for political purposes? I do not think a penny of taxpayer money should go to advertising, TV advertising. 

Here is the other criticism: People have pointed out it has taken 

a while for some of the money to get to people. I think it was, like, 

one article said one house or one homeowner in one instance coming to your department, yet the money the TV advertisers sure got 

through pretty quickly. I mean, when people want to advertise and 

promote themselves, all of a sudden, boom, money is on TV and so 

is their ad. 

So I would just ask that all of you who are civil servants—and 

I know you want to do the right thing—reconsider whether or not 

it is a good idea. My understanding is it took a waiver from your 
25 

office to use these grants for this and that the TV ads had to be 

approved in that sense by your office. 

The other thing is that there have been community development 

grants given to something called a River Festival in Manhattan. I 

sure hope that none of this money is going to it and that I do not 

find out in a year that the River Festival got money for this, because the River Festival is full of all kinds of great and groovy 

things like performance art, a bunch of people showing up and 

holding their cell phone up and playing the same songs. That 

would be a lot of fun. I would love to attend that. But I hope we 

are not going to find that Hurricane Sandy relief money went to 

stuff like that, because as you said, community block grants can go 

to anything. And so I sure hope that someone is watching the taxpayer’s dollar. 

That is all I have. Thank you. 

Senator BEGICH. Thank you very much. 

Secretary Donovan, can I followup? I wanted to make sure we 

are clear on one thing. CDBG money, as a former mayor—and I 

think now Senator Booker would say the same thing—it cannot be 

used for anything. There are limitations. Is that correct? 

Secretary DONOVAN. That is exactly correct. I did not say it could 

be used for anything. 

Senator BEGICH. Right. That is—— 

Secretary DONOVAN. It has very clear statutory purposes, and we 

reviewed and made sure that it did meet those purposes. If Congress determines that economic development campaigns should not 

be included, then obviously that could be added to legislation. But 

currently they are within the bounds of the law. 

Senator BEGICH. Let me get to a broader question. FEMA—and 

I think I know the answer to this, but I want to have the three 

agency people other than FEMA answer this, because I think 

FEMA—when I look at the money of appropriated, obligated, expended, you are fairly high up there. You have moved the money 

out there. The other agencies, it is kind of in process or not as 

much in the percentages compared to what is appropriated. So 

maybe if I can start with Secretary Donovan and then go to the 

next two, just so I understand why there is a lag. I want to make 

sure I hear this for the record because I understand FEMA because 

you have to get in there—you do not have the luxury of waiting 3 

years and bringing the money then after the fact. So help me understand that, because that is one of the questions that I get a lot 

of times when they see the reports and they say they have gotten 

it appropriated, where is the money being spent? 

Could I start with you, Secretary Donovan? 

Secretary DONOVAN. Absolutely, and I think this is a very important point. One of the things that is critical to understand about 

CDBG is by law it is only allowed to be used on needs that are not 

met by other funding sources, and so—— 

Senator BEGICH. So you are the last bucket. 

Secretary DONOVAN. We are the third step, effectively, for homeowners, for small businesses first—and I think we have seen very 

consistently that FEMA moved very quickly to make that first allocation, but only up to $30,000 can be used for homeowners, for example. 
26 

Senator BEGICH. Right. 

Secretary DONOVAN. And that takes care of the moderate damage. You must make sure that your insurance company has paid 

their full claim, and that process needs to happen. And then only 

when those two have been utilized can we then make CDBG available, and that is why CDBG only began to pay out more recently. 

Let me just give you one comparison. At the point where we are 

today since the appropriation was made by Congress, we are more 

than 20 percent faster in Hurricane Sandy than we were under 

Hurricane Katrina; we are more than 300 percent faster than we 

were in Hurricane Ike on CDBG. And so, clearly, we have improved 

the process. Are there things we could do legislatively or within our 

own power to make it faster? Yes. We are working on many of 

those things. But, relatively speaking, I think we have both been 

faster and more careful in the way we are using CDBG money in 

this story. 

Senator BEGICH. And as I move to Mr. Porcari, can I ask you, 

some of those ideas at some point legislatively or regulatory, can 

you share those with the Committee at some point? So if there are 

things we could be doing to help that in the future as we continue 

and improve that flow, that would be, I think, helpful. 

Secretary DONOVAN. Absolutely, and I would just compliment the 

Committee on having made many changes for Hurricane Sandy 

that have sped up spending already. 

Senator BEGICH. Very good. I was going to ask you, if I have 

time, I will ask you about the bridge issue and how you used the 

techniques. I want to know more about that. 

Mr. PORCARI. Mr. Chairman, thanks for an excellent question. 

The transportation funding that was provided in the supplemental 

is being used for very specific transportation purposes, and I will 

just quickly go through mode by mode. 

The Federal Aviation Administration (FAA), with a direct appropriation, for example, has repaired the damage to the three major 

airports in the region. That is work that we have done ourselves 

or with contractor forces. 

The Federal Highway Administration (FHWA) first released 

money within hours of requests under what we call ‘‘quick release 

authority’’ to get the work started on building the highway system. 

And then its Emergency Relief Program operates on a reimbursable basis, so the work gets done, and it is done by State or local 

governments, and the Federal Government reimburses at the end. 

That is the way that we protect and make sure that we get the 

project built the way it should be, and in this case with some resiliency for the future. 

The Transit Program, we have made extensive use of what we 

call ‘‘pre-award authority,’’ so specific transit projects as part of the 

Hurricane Sandy recovery have been given pre-award authority 

where the transit agency will be rebuilding those facilities according to Federal requirements and then reimbursed as part of the 

process. That is a way to get the project underway quickly and 

make sure we get the product that the taxpayers deserve. 

Senator BEGICH. Very good. Jo-Ellen. 

Ms. DARCY. As I said in my opening statement, we have several 

buckets of money. 
27 

Senator BEGICH. Right. 

Ms. DARCY. Some for investigations, which is ongoing studies, as 

well as our comprehensive studies, so the spend-out rate on that 

is not as quick as would be for our emergency money. The emergency money we had we have expended nearly all our expenditures, and that will be completed in the early part of next year. 

Those were the repairs to our existing projects; repairing the sand 

dunes that had been devastated. 

And the third bucket of money is for construction. We had 18 

projects that were authorized but unconstructed, and some of those 

projects had been authorized several years ago. What we are doing 

now is looking at those projects to see whether in the light of climate change and sea level rise, those projects are still—will be sustainable and resilient. The study is the floor of the process and the 

less expenditure. But once we go through that study process, do the 

pre-construction engineering and design, which is a smaller 

amount of money, and get to the actual construction, that is when 

you will see the outlays on these projects. 

Senator BEGICH. Very good. I have one quick question, and then 

I am going to go to the members, and we are trying to do 5-minute 

rounds here, so I will try to be quick. 

Cas, let me ask you a question. Of course, I am going to speak 

in a moment. I am going to substitute myself back to my mayor 

days. The frustration I always had with the State organizations 

was they would get this money, and then you would hope and pray 

it would come down to you at some point in some rational, deliverable way. Can you give me your sense of how that worked? Or 

could there have been—and maybe later you could give some recommendations. How did that work? When that money—CDBG, I do 

not know in this case if it went directly to State or local, I do not 

know how that went here. But can you tell me how that worked 

when money went to the State and then you are down there waiting for it? 

Mr. HOLLOWAY. Well, in this case, Mr. Chairman, the funding— 

actually New York City got its own direct allocation. 

Senator BEGICH. They did. 

Mr. HOLLOWAY. Which was great for us, because the level of 

damage that we sustained and our ability to take those resources 

and really start working with them immediately is really strong. 

So, far, the allocations that have come, there is a separate allocation for the State of New York, and New York City has gotten its 

own allocations. From that perspective it has been great. 

Senator BEGICH. So that has worked. 

Mr. HOLLOWAY. Yes. 

Senator BEGICH. Fantastic. Let me stop there, and I do have additional questions, but let me go to Senator Booker and then Senator Gillibrand. 

Senator BOOKER. If we may, the Senator from New York, who 

has a wonderful view of New Jersey, would like to go first because 

she has some place to go. 

Senator BEGICH. Please. 

Senator GILLIBRAND. Thank you, Mr. Chairman. Thank you very 

much, Senator Booker. 
28 

I appreciate all the work you have done, and every single one of 

you has done extraordinary work in terms of getting money flowing, getting large projects done, getting things up and running, and 

I appreciate it. 

But what I hear from my constituents is not good. I hear so 

many stories of constituents who cannot rebuild, who have not gotten money. There is so much red tape that they cannot possibly 

find their way through. And so I want to ask each of you some 

issues of red tape that concern me that hopefully you can give me 

the road forward so I can let my constituents know that relief is 

possible. 

Secretary Donovan, this one seems very difficult. A number of 

my constituents were dismayed to learn that because they accepted 

Small Business Administration loans that they are now ineligible 

for CDBG funding. Now, I understand the need to make sure there 

is no duplication in getting Federal benefits, and we want to protect against fraud. And that is absolutely critical to the integrity 

of this program. But is there any distinction that could be made 

between grants and loans under the duplication of benefits regulations? And under the current Federal regulations, what are the options for Hurricane Sandy-affected homeowners who accepted SBA 

loans but who believe they are at a financial disadvantage relative 

to homeowners who chose not to accept an SBA loan? 

Secretary DONOVAN. Senator, this is something that your office 

raised with us and that others did, and we actually made clear that 

even if a homeowner or business had been approved for a loan, 

they were still eligible for SBA assistance. So, in fact, it is not accurate that they are ineligible. 

Senator GILLIBRAND. But they have been told they are ineligible, 

so is that something we can fix in terms of those communicating 

with—— 

Secretary DONOVAN. Let me be clear, though. Like everything 

else in CDBG, it is up to local communities to determine exactly 

how they use these funds, and one thing that we have encouraged 

communities to do—and I want to be clear about what situation the 

homeowners you are talking to. If a homeowner, if a small business 

can afford to repay a loan, we do not think—and we have made 

clear—that communities should make grants available because 

these are precious limited dollars, and so what we have encouraged 

communities to do is to do an evaluation. And I have heard frustrations from business owners, homeowners. They say, well, somebody 

else is getting a grant, I am getting a loan. Well, the fact is if they 

can afford that loan, then we encourage communities to do an underwriting and to evaluate that and to use grants only where a 

homeowner or a business cannot afford to repay a loan. 

And so that is the guidance that we have given, but we do leave 

flexibility for communities to make that determination. 

Senator GILLIBRAND. Well, I would appreciate that you make 

that guidance very clear when someone is looking at an SBA loan. 

They need to know what limitations they will be under in the future. It needs to be clearer. 

Secretary DONOVAN. I agree there was confusion, and we have 

absolutely worked with your office, and you have raised this before 

to try to clarify that as much as possible. 
29 

Senator GILLIBRAND. Thank you. 

Secretary DONOVAN. We are happy to do that more. 

Senator GILLIBRAND. Deputy Mayor Holloway, so we have read 

a lot of news stories, and we have done yeoman’s work on so many 

infrastructure issues and done excellent work. But for homeowners, 

there is still enormous challenges because, while FEMA caps the 

payment out at 30K, very few people receive the full payout. Their 

home might have been destroyed, and they are eligible for a grant 

of $8,000. 

So, while we do our best, it is not enough for these homeowners 

to rebuild. And, in fact, there are families that are still homeless 

a year out, and that is horrible. 

So specifically for Breezy Point, Staten Island, and the 

Rockaways, how quickly do you think CDBG money will get to 

homeowners? And what percentage of those areas have actually received any CDBG money? 

Mr. HOLLOWAY. Well, so each of those areas, having been there 

many times and worked with, particularly in Breezy Point, the 

homeowners association, we have done a lot to try to advance 

building. It is not only getting the money. It is being able to actually build, put things in the ground. And so we have been able to 

advance that. 

I think that in terms of FEMA recovery, that really is a case-bycase determination of their assessment of what the damage is. We 

now have 26,000 families that have signed up for Build It Back, 

and we are in some stage of financial assessment for them. So as 

Secretary Donovan said, the CDBG money is money of last resort, 

which means that you have to do an insurance verification; you 

have to figure out whether they have any other FEMA money, any 

funds from any other sources. We are working closely with insurance companies, but we have 1,400 requests for verification from 

one company in particular that have not been met. And these steps 

in this process—which we are not opposed to in any way because 

you do have to make sure that the dollars are going to people who 

actually need it, but they do take time. 

Now, I think we have had some CDBG money flow, but I will say 

the mayor is not satisfied that it has gotten to enough people yet. 

I think you will see, I am confident you will see, between now and 

the end of the year, we will begin to ramp up to hundreds and then 

ultimately thousands who will be getting that funding. 

Senator GILLIBRAND. Thank you. Well, let me address some of 

the red tape that your mayor is probably experiencing with regard 

to Administrator Fugate. So FEMA worked with the local—these 

localities to submit project work sheets, which makes them eligible 

for reimbursement. And over the last year, many of these project 

work sheets have still not been paid, and these delays have caused 

setbacks to local projects and bottom lines, many of them borrowing while they await payment. 

Do you know how long—or how many project work sheets FEMA 

is still processing and what the anticipated timeframe for turning 

those around is? 

Mr. FUGATE. Senator, it depends upon the project. A project work 

sheet is a tool to determine what is damaged and what is going to 

be needed to make repairs. We have prioritized working with the 
30 

State. Some of the first projects were going to be all the debris and 

all of the emergency costs that were expended. Those were dollars 

that went out the door immediately. And so as we have been going 

through that, we have to have documentation to demonstrate the 

costs so that we can satisfy the requirements that they did the 

work, it was expended, and we reimbursed that. 

Most of the emphasis has been on the initial cost. There are 

some that still need more documentation—but if you have specifics, 

we will work on them. 

Now, the rebuilding piece of those project work sheets is going 

to take more time because once we get in the permanent work, we 

have several different tools we are trying to use to speed this process up, but we still have to go and work through processes to ensure that is it over 50 percent, are we going to be able to mitigate 

this, and what is the longer-term requirements to rebuild? 

Senator GILLIBRAND. Thank you, Administrator. My time has expired, but for Assistant Secretary Darcy, obviously Long Island is 

so important, and people are very concerned about the time it is 

taking for the stabilization projects within the Fire Island to 

Montauk Point (FIMP) study to be started and to know when these 

emergency stabilization projects will be done. 

Can you just give a quick update about where we are in that 

process? 

Ms. DARCY. For the Fire Island to Montauk Point? 

Senator GILLIBRAND. Correct. 

Ms. DARCY. Well, we have begun some of the emergency response, which was part of rebuilding what was there. We are currently reviewing the Fire Island to Montauk Point, which as I mentioned is an authorized but unconstructed project. So we have to 

relook at it to make sure that it is in today’s sea level rise and climate change lens that we are looking through and building it to 

the right dimensions. We are committed to doing some expedited 

review processes for all of these projects. 

Senator BEGICH. Thank you very much. Senator Booker. And we 

will probably have time for another round if there are available 

questions. 

Senator BOOKER. Senator Begich, I just want to say again thank 

you for holding this hearing. I have a lot of affection for you even 

though we have only been colleagues for 6 days. [Laughter.] 

But that affection is born from the fact that you know what it 

is like to be a mayor and the difficulties you have grappling with 

real issues on the ground every single day. People do not know 

what a Secretary’s number, they do not know necessarily what a 

legislator’s number is, but they know where you live, and it is 

something that I take very seriously. And I just want to say to the 

panel assembled, I am grateful that you are here. I have only been 

here for 6 days. I still have that new Senator smell, I am told, but 

I have had a chance to deal with the Secretary on multiple occasions as mayor, and I think the Obama Administration has many 

stars, and frankly none of them shine brighter than you do. 

The frustration my office already has is that we are dealing with 

lots and lots of people who feel this sense of discontent, ill at ease, 

frustration, and a lot of stories, and we are unraveling them, and 

your team, the team assembled here, has been in credible with my 
31 

office. Again, Mr. Fugate, I look forward to meeting with you and 

bringing to you a lot of the individual concerns that are not necessary to go through here because you have made yourself so available, and I am sure I can expect the ability to meet with all of you 

as I deal with what is a sense of urgency from my office. 

Secretary Donovan thank you very much. You can call me 

‘‘Cory.’’ I know the best thing about you is that your head is with 

the entire State, but you married a New Jerseyan, so your heart 

is with New Jersey, I am sure. 

Secretary DONOVAN. As your colleague says, I married up. 

Senator BOOKER. Yes, you did marry up most exceptionally. So 

for me in my office—and we plan on spending a lot of time in the 

district over this next month meeting with a lot of families, because 

many of them do not know who to call. They are so frustrated. 

They do not feel like they can rely on government anymore. They 

have gone through some of the red tape and gotten nowhere. And 

so as we stood—so the two points I want to make, to the Chairperson, I am hoping that we can do more of these as the recovery 

continues because this is not going to be finished in a month, in 

2 months, in 5 months, but this is very good as we move forward. 

Senator BEGICH. Very quickly on that, I will tell you one of the 

goals of this Subcommittee and another Subcommittee that I chair 

is one of the roles the Senate should do more of is oversight like 

this. So we are not waiting for a crisis to occur, but, 6 months from 

now or a year from now, we are going to have these same conversations because we want to keep track of how it is going, and if there 

are legislative and regulatory changes we need to make, we should 

be trying to do that in concert with what is going on. So, absolutely, the idea is to have oversight and to work with agencies to 

improve what they are doing, but also make sure people on the 

ground are getting what they supposedly had thought they were 

getting. 

Senator BOOKER. Right, and my hope is—— 

Senator BEGICH. And that should not count against your time, 

what I just consumed. 

Senator BOOKER. I appreciate that. 

Senator BEGICH. I am telling that to the staff, whoever is the 

clock holder. 

Senator BOOKER. The Senate is a generous institution, I am finding. So the—— 

Senator BEGICH. He is new. [Laughter.] 

Senator BOOKER. So the point for my team right now is that 

sense of urgency you get from being a mayor is the sense of urgency we are going to treat this problem with, because we have 

families in crisis, we have challenging counties on the western 

shore of New Jersey who really feel like they have been left out of 

this equation, who still feel like there is everything from debris still 

in bodies of water to houses still destroyed. And so my hope with 

everybody as we set up our internal benchmarks is that we will be 

able to continue to touch base over a regular period of time to make 

sure that your professionals, your extraordinary professionals, are 

operating with that constant sense of urgency and driving your 

teams as hard as possible to meet the needs of the State of New 

Jersey. 
32 

And so in the 90 seconds that I have remaining, to my friend 

and, again, our leader, I have learned a lot from and have a lot of 

respect, when we stood together just about 2 weeks ago when I was 

still Senator-elect, we talked about the next tranche being released, 

and it was interesting, though, afterwards I heard from the mayors 

assembled and some others, some of their individual frustrations. 

And so my hope is—obviously there is going to be a third 

tranche, and you have done a lot to expedite funding compared to 

what happened in previous—you brought it to a whole new level. 

But my concern is it still does not seem fast enough. And I am 

wondering, Secretary Donovan, in the few seconds I have remaining, could you just talk generally about things you are doing to further expedite it and help me understand sort of your expectation 

on that third tranche which is so critical? 

Secretary DONOVAN. Senator, thank you for your leadership in 

Newark as well. The city is much stronger, many families that 

would not have gotten help without your leadership. I know there 

is still pain there, but thank you for your leadership locally. 

Senator BOOKER. Thank you. 

Secretary DONOVAN. And I know you are going to bring the same 

energy to the Senate as well. 

I think the problem with talking about these is this is blocking 

and tackling hundreds of small decisions that are made along the 

way, and so I could give you a list of 20 or 30 key changes that 

we have made that have made a difference. Just one example. 

There was some cruel irony that anyone who started rebuilding 

themselves would not then be eligible for CDBG help. We changed 

that with urging from many of your colleagues so that now somebody can get reimbursed. That is just one small example. 

Historic preservation reviews and the environmental, we followed 

on with FEMA’s good work, made a programmatic agreement that 

sped that up significantly. So there are hundreds of small things 

like that. 

I think the areas where I would say big picture are most important, the insurance process, not just on flood insurance and having 

enough reviewers and other things in a very dense area like New 

York or New Jersey, but also getting homeowner policies aligned 

so that families can know—often they get their insurance, and then 

they cannot even get access to it because their bank is there. And 

that is something that we have worked a lot on. I think that is critical. And then the environmental reviews. 

The Committee did something very important in giving us the 

authority when FEMA puts money into a project to just accept 

their environmental review. We do not have that authority for any 

other agency. It is something we think legislatively ought to be 

done. That is an example. I would be happy to provide you a longer 

list. 

Senator BOOKER. OK. Thank you. 

Senator BEGICH. I will let you go ahead, Senator Schumer, and 

I will get back—if you are able to stay, we will give you another 

round here, but Senator Schumer? 

Senator SCHUMER. Thank you, Chairman. 

The first question is to Assistant Secretary Darcy. I am really 

worried about more bureaucracy getting in the way of doing FIMP, 
33 

of doing Rockaway, of doing Fire Island. One of the problems we 

have is the Office of Management and Budget (OMB). Even though 

we gave the Secretary the authority to approve general reevaluation reports without extra review by OMB, they seem to be demanding review. I have called OMB about this. We have talked 

about it. But I am really worried about their getting in the way of 

both the FIMP study, Fire Island to Montauk, and East Rockaway 

Inlet to Rockaway Inlet Reformulation Studies. If they have to review everything, it is going to slow things down too much, and that 

gives me worry about another storm. 

Could you tell us what is happening? What is your view, your 

candid view, of OMB’s, shall I say, meddling here and what we can 

do to speed things up? 

Ms. DARCY. One thing that we are doing, Senator Schumer, with 

both the limited reevaluation reports as well as the general reevaluation reports, is we are having monthly meetings with CEQ 

and OMB, with our division commander, who is sitting right behind me, General Savre, to give them a status report on a monthly 

basis of where we are on each of the 18 projects that you were referring to that were in the Interim 2 report so that we can all know 

what the status is, where we are, if we see problems coming up. 

That will help to speed that review because it will be ongoing before there is even a final product. 

Senator SCHUMER. But it is my understanding—and I was one of 

the, probably the lead author of this legislation—that we did not 

need OMB approval for the things that were already authorized, 

like FIMP. Are they seeking such approval? And is it standing in 

the way? I do not mind you consulting with him. That is fine with 

me. 

Ms. DARCY. At this stage, Senator, as I say, we are going to be 

consulting with them and reviewing this, but we will follow the law 

as it was—— 

Senator SCHUMER. So, without being too confrontational to your 

dear friends at OMB, you are agreeing with me that the law does 

not require their approval. 

Ms. DARCY. That is correct. 

Senator SCHUMER. Thank you. Very good answer. [Laughter.] 

Senator BEGICH. That was the perfect answer. 

Ms. DARCY. Oh, really? 

Senator BEGICH. Yes. 

Ms. DARCY. I am not sure I feel real comfortable about it. 

Senator SCHUMER. Yes. [Laughter.] 

Perfect from this side of—— 

Senator BEGICH. Let me just say, if I can, for Senator Schumer, 

your honesty and your forthrightness is greatly appreciated. 

Senator SCHUMER. Right. OK. Next we will go to Secretary—— 

Senator BEGICH. They are hoping they are not picked. I can feel 

it. 

Senator SCHUMER. To Secretary Porcari, another fine—and I 

mean it. You guys and gals have done a very good job. Porcari is 

from Rochester, so that explains a lot of it. But in any case, two 

questions on highway stuff. When can we expect an announcement 

of the remaining $5 billion in FTA emergency relief funds? And, 

more importantly, Federal highway relief money cannot be used for 
34 

mitigation, like on Ocean Parkway; that is why we turned to other 

funds to help us with Ocean Parkway on Long Island. But are you 

considering using any of your authority to use FTA money for resiliency on other transportation modes? You can do that should you 

wish, as I understand it. It was not used on Ocean Parkway, but 

it should be used in other places on Long Island and in New York 

City. Tell me a little about that. 

Mr. PORCARI. You are correct, Senator. First, the authority exists 

under the act for the Secretary to transfer money to another mode. 

Senator SCHUMER. Right. 

Mr. PORCARI. First, to answer your question on the next tranche 

of transit money—and, again, that is the single biggest need in the 

transportation network, as you well know. We have a Notice of 

Funding Availability that is in internal review right now. We will 

have that completed very quickly. It will be for $3 billion, specifically awarded on a merit basis for resiliency projects. We will coordinate it with the task force by, for example, making sure that 

we have Corps and HUD and FEMA and other reviewers looking 

at that from a systems perspective to make sure—because this $3 

billion is honestly a fraction of the need that is needed out there 

in the transit network. 

Senator SCHUMER. Right. 

Mr. PORCARI. The thinking is also that there are rail projects 

that may well fall into that same category. There are shared use 

facilities, which you are well aware of, like Substation 41, which 

is an Amtrak-owned substation but serves both New Jersey Transit 

and Intercity Passenger Rail, and either through the award process 

directly or through the Secretary’s transfer authority, there may be 

rail projects. We do not anticipate going beyond Transit and Intercity Passenger Rail projects with that. 

Senator SCHUMER. Right. I just hope you will keep an open mind with the remaining $2 billion in terms of resiliency, using your authority to transfer so we can build better to avoid the next storm. 

Very important. 

Mr. PORCARI. Resiliency will certainly be our focus, and we know, 

given the vulnerability of the whole transportation network but, in 

particular, the transit system that—and what we know about sea 

level rise, for example, we have a lot of work to do. 

Senator SCHUMER. You bet. 

Could I ask one more question with your indulgence, Mr. Chairman. 

Senator BEGICH. You will also have time for a second one. 

Senator SCHUMER. OK. Great. This goes to first Mr. Holloway 

and then Shaun Donovan. As is obvious—it is not news—homeowners are complaining they are not getting the money quickly 

enough. There are all kinds of reasons for that, and as I said, I 

think the second year they are going to be much happier with the 

monies in the pipeline and flowing. The spigot is now open. But 

what, in your opinion, Mr. Holloway—and I am sure this would be 

true for your colleagues in Long Island and West Chester as well— 

is the biggest red tape problem getting in the way of aid to homeowners and projects at the Federal level? 

Mr. HOLLOWAY. Well, I will start by saying that there has been 

a lot of red tape that previously had existed that has been cleared 
35 

up, and so that has been tremendous. I think that it is a challenge 

to—since CDBG is essentially the backstop, it is a challenge to get 

to the backstop. 

Senator SCHUMER. Right. 

Mr. HOLLOWAY. Now, that is not to say that that is necessarily 

HUD’s issue, but getting verification from insurance companies, 

getting everybody’s financial conditions in order is very challenging 

to do. And so if I had to say what would relieve that issue, figuring 

out the right way without opening up the specter of, duplication of 

benefits and all of those things, which have really driven a lot of— 

the creation of a lot of process to basically get enough data to say, 

OK, we are pretty sure we are pretty good at—that your 85 percent, we can give you some portion of the funding even if you are 

not at the end of the verification process. I know that would be difficult to do, but that is the challenge. 

Senator SCHUMER. And, yes, a lot of that—we do not want to pay 

when insurance has already paid. Would you agree with that, Secretary Donovan? 

Secretary DONOVAN. I think it is absolutely the center of many 

of the things that appear as red tape to homeowners, whether they 

are necessary or just, frankly, unnecessary delays. 

One of the things that, as we started to work through this, my 

team began developing is something I call a ‘‘program in a box.’’ 

One of the problems that you have is that each State or locality developing—particularly smaller localities. New York City has, high 

capacity—I am a little biased here, but as high capacity as any city 

in the country. But for many of the smaller communities that have 

been hit to create a brand-new program to figure out how to do 

these checks and other things is a major barrier. And so what we 

have begun to work on is a program in a box where literally we 

could say here is the model, just adopt it, and it will allow you to 

move faster. I do not think that takes care of, by any means, all 

of the issues, but it certainly could remove some of the unnecessary 

red tape. 

And then I think it is worth going back and thinking about, on 

duplication of benefits, are there things that we can do to simplify 

and streamline that while still not running afoul of, basically subsidizing insurance companies. 

Senator SCHUMER. Right. Thank you, Mr. Chairman. Thank you, 

Senator Booker. 

Senator BEGICH. Thank you very much. 

Let me have a couple quick ones, and then I will go to Senator 

Booker. It dawned on me as we were talking that in your testimony 

you mentioned what the impact of sequestration was to some of the 

resources. So in this next round we are about to hit, the CR in January and potential sequestration if we cannot get a budget, will 

that have an impact on the additional resources you have? 

Secretary DONOVAN. Generally speaking, Senator, it was a onetime reduction of 5 percent. 

Senator BEGICH. OK. 

Secretary DONOVAN. So specifically for the $16 billion—— 

Senator BEGICH. You have already had the reduction—— 

Secretary DONOVAN [continuing]. It was a 5-percent reduction 

down to 15.2, and that is pretty much across the board. 
36 

Senator BEGICH. And that is—everyone else—OK. Good. 

Let me, Ms. Tighe, if I can ask you a question. When you were 

talking, you had suggested some reporting process that really are 

not in place. Are you going to prepare at some point—or could you 

prepare, I guess—for this Committee kind of what those items you 

would recommend to ensure that at least there is more transparency in reporting of how the expenditures are being done so 

people like yourself and others can review them in a more accurate 

way, and if that is done by regulation or legislation? That is the 

first question. 

The second question is: Have you, in what you have been seeing 

and looking at, uncovered any questions or hot spots that might 

say here is an area we better be looking at today in regard to some 

of these expenditures? And if the answer is yes to that, is that occurring? Does that make sense, that last question? 

Ms. TIGHE. Yes, it does. Mr. Chairman, we are happy to send you 

information on specific recommendations that we would make, but 

just to sort of give you—one thing we really learned from Recovery 

is that the public is very interested in where money is going, really 

specifically where it is going and what it is being used for. And a 

lot of our impetus is on transparency of information. 

It seems like an easy fix to us to do what the Federal procurement database already does, which is when a hurricane or a special 

event hits, they give it a special code. Why can’t we do that on 

USASpending.gov so that we know what on that website is being 

spent for Hurricane Sandy? It just seems easy to us. It is—— 

Senator BEGICH. What do they say? 

Ms. TIGHE. Well, we have asked the question and, it had to be 

something that was done right out of the box. It is not something 

we can do now. It is not something—and I—— 

Senator BEGICH. Well, let me pause you there. 

Ms. TIGHE. Please. 

Senator BEGICH. We have four agencies here. 

Ms. TIGHE. Yes. 

Senator BEGICH. So your statement is good, so I guess here is my 

question, if I can pause you for a second, to the four agencies. Can 

you set up a system now or into the future that whenever—I mean, 

to assume there is no disaster coming would be a mistake. There 

will be one at some point. Can you do this simple system here? 

Secretary DONOVAN. So, Senator, let me address this, because we 

have been working with the Recovery Accountability and Transparency Board on this. We have set up a system to collect data. We 

do have a website available monthly with information on spending. 

I think the issue is not that we cannot do that. It is that to get 

to the level of detail and information that the Inspector General 

was talking about requires additional steps. And so we do believe— 

and, in fact, it was part of our Sandy Recovery Task Force report— 

that we ought to have a legislative requirement for future appropriations like this that we create a project management office and 

that there are data requirements in terms of—— 

Senator BEGICH. But do you need a legislative requirement? Why 

don’t you just do it? 

Secretary DONOVAN. The simple answer is that because of—the 

extent of work was enormous to get to that reporting for—it means 
37 

inserting in hundreds of systems across the Federal Government 

particular lines or codes, and that is not something you can do 

overnight. It takes significant investment. 

Senator BEGICH. Ms. Tighe wants to jump in. Let me go back to 

her for a second. 

Ms. TIGHE. Well, I must confess to not knowing the mechanics 

of what happens on the Federal Procurement Data System, but 

every contract let by the government, it is really a system that the 

General Services Administration (GSA) has set up in the Federal 

Procurement Data System that you have to just fill in a box that 

says, yes, this is a Hurricane Sandy, it gets a national interest action code, I think it is called. I think we are really talking about 

something that I think USASpending itself could generate. I do not 

know if it has to mean, changes to thousands of agencies’ systems 

feeding data. And I know that the HUD task force has done a good 

job, and they do have a website that does discuss spending. It is 

just that it is at a very high level, and the Secretary is right that 

what we are really talking about is a level that is much more 

granular. 

Now USASpending has some of that. It is just that, it does not 

separately capture or you cannot, search by, hey, what is a code for 

Hurricane Sandy? There is really no reason why the major portal 

we have for Federal spending cannot do that. I do not think it is— 

and I am not a person who can tell you what the mechanics are 

of having that done, but I think it can be done without actually legislation, I do not think. There just has to be a decision made to do 

it. 

Senator BEGICH. Let me hold you at that, because I have run out 

of time, but let me ask you that last—the first part of the question, 

and that is, can you produce for the Committee that shopping list? 

Ms. TIGHE. Absolutely. 

Senator BEGICH. OK. Would you submit that? Then if you can indicate if you think it is regulatory or legislative, so that can help 

us do a little understanding of what we can do here or what we 

can press to have happen. 

Ms. TIGHE. We will. 

Senator BEGICH. Fantastic. 

Senator BEGICH. Let me go to Senator Booker for your next 

round. 

Senator BOOKER. Sure. I have one more question, but I take solace from the fact that this Committee as well as other ones that 

have jurisdictional oversight will have other hearings in the future, 

because obviously this is probably one of the worst top two storms 

that has hit our country in the last century in terms of its impact, 

damage, and cost, and especially in our region, in the greater New 

Jersey region, which is one of the most productive in terms of our 

national gross domestic product (GDP) and important from an arts 

and cultural perspective. This is obviously something of great concern not just to our region but to the country as a whole. So I am 

glad—and just want to, again, Mark, for the record, my gratitude 

that everyone robustly shook their heads up and down about their 

willingness to meet with me directly and work in close conjunction 

with my office as we try to tackle these problems. 
38 

The one thing I will bring up—and I know, again, I am looking 

forward to meeting with Mr. Fugate and being able to discuss this 

issue, but I guess I am confused. I know at the municipal level 

things sometimes do not make sense, but this is the national level, 

and I am sure things are a lot more rational here in Washington. 

And so, the thing that has chilled my understanding of what is 

going to happen to my region when the flood insurance rates go so 

up, it is going to devastate, completely devastate areas of New Jersey, and not only will it affect homeowners, but they will not even 

be able to sell their homes because who is going to buy their 

homes, often with such high insurance levels? 

From my understanding, and just my beginning to dig into this 

personally, when Biggert-Waters passed, it required FEMA to do a 

study about the insurance affordability and the impact it would 

have on the region. And it seems like a critical thing, before you 

allow the phasing in of these incredibly high insurance rates, that 

we would know sort of what we are going to do to that region. 

So I guess just for a matter of the record for now and something 

that we could definitely get into more when we talk, could you let 

me understand what is going on with that study and what it really 

says about the devastating impact, potential devastating impact 

this could have to regions like mine? 

Mr. FUGATE. Yes, Senator. The goal of Biggert-Waters was to 

move toward an actuarially sound insurance program that would 

encourage private sector participation because we would no longer 

subsidize rates below market value. There were many pieces to 

that, and generally, when you would see legislation that would tie 

a specific action before further action would go, the language would 

have been written so that the affordability study would have been 

a requirement before you went to the next steps. The way the legislation was written, it was all done concurrently. So the phase-in of 

the rates was not tied to an affordability study being done. It was 

an affordability study was to be completed but not hold up any of 

the other implementations. This is the area we have come back and 

worked, and Senator Menendez had asked for technical drafting assistance on the initial funding that we were given and timeframes. 

We went to the National Academy of Science, they informed us 

that in the timeframes given and the funding provided they could 

not complete the study. 

Senator BOOKER. So help us understand this. Does that even in 

any way seem rational to you to let the phasing in happen without 

even understanding and having the study completed? 

Mr. FUGATE. The ability to not phase in was not permitted in the 

legislation. There were certain timeframes that we were required 

to implement those phase-ins to start moving toward actually 

based—a year ago, we had already done secondary homes, commercial, and repetitive loss. The next steps were for those people that 

are currently subsidized, begin phasing them in over a period of 

time. And then the one that is causing the most immediate problem is for those folks we are seeing map changes where there is 

a very limited phase-in. All of these changes were predicated upon 

when the legislation was passed, you had certain timeframes to get 

that done, and the only delays was the regulatory process of implementing those rules for that. 
39 

So the affordability study, although still required; again, we provided the technical drafting assistance that we needed to be able 

to expend the funds that the National Academy of Science said 

would be required and allow the timeframes they stated it would 

be allowed, and then postpone the increases for those areas until 

that study is done. 

Senator BOOKER. So that sounds like a recommendation, in other 

words, it makes sense to do the study. The study right now is not 

being done, nor do we have the money to do the study. But yet we 

are still moving forward with the phasing in. It sounds like you are 

saying that the advisable thing to do would be to do it right, to actually understand—to do the study, allocate whatever resources are 

necessary so we understand and we do not fly into this blind and 

hurt a lot of people. 

Mr. FUGATE. Again, understand that as the legislation was 

signed into law, we have been implementing the law as it has been 

designed. This is an area that, when Senator Menendez in the previous hearing that I testified on flood insurance, he specifically 

asked for us to support technical drafting assistance, and that is 

exactly what we have been working on, is how do we make insurance so that we do not subsidize risk beyond which there is a return of benefit to the taxpayer, but obviously the intended goal 

should not also be place people out of their homes because we make 

insurance so unaffordable for existing homeowners. 

Senator BOOKER. I understand that. I guess what I am missing 

is the link, and I will talk to Senator Menendez about this. I guess 

I am missing the link. So, in other words, you have provided the 

technical assistance, but it is still not done. 

Mr. FUGATE. It still will require legislative action to change this 

to be signed into law, because as we understand the law, we were 

not given any flexibility in implementing the timeframes once we 

had the regulations done that the affordability study was not—the 

increases were not dependent upon the affordability study being 

done. It was written in such a way that it was all being done concurrent. 

Senator BOOKER. So you are saying it is really on the legislature 

to act in order for this to be done the way it should have been done. 

Mr. FUGATE. Senator, as I testified last time, we have not found 

any way to delay those implementations without the assistance of 

Congress giving us the ability to suspend some of those increases 

until such time as an affordability study is done. 

Senator BOOKER. So we are rushing forward with this, not knowing the impact it is going to have, not knowing if we have even 

struck the right balance. That to me just seems a million percent 

wrong and damaging. Would you agree? 

Mr. FUGATE. Well, I would agree, as I have testified, that if we 

do not address affordability, our risk is we are not going to be able 

to move this program to a sound basis. We will continue to subsidize risk and encourage growth and development where we probably should not be building that way. And we are going to put people out of their homes. 

Senator BOOKER. Right. 

Mr. FUGATE. So there is a balance here that has to be struck between looking at affordability but not artificially creating a situa-
40 

tion that we are subsidizing risk at such a low rate we continue 

to increase our vulnerabilities to future disasters. We have to 

change how we are building. But it should not be at the expense 

of people in their homes forcing them out in the short run, but understand that in the long term we have to look at how we build 

in coastal communities in such a way that people’s homes are not 

threatened every time we face a storm. 

Senator BOOKER. And I agree with you, but the frustrating thing 

for me is you have to know before you go, and we are acting without having the knowledge base necessary to make sound decisions, 

and we could end up with a situation profoundly devastating. That 

is very frustrating. 

Secretary DONOVAN. Senator, if I could make two points here. 

One is that this is an issue the Administration raised when 

Biggert-Waters was passed. In our statement of Administration 

Policy on this, we raised the fact that there was not an affordability provision that would allow us to protect folks. It is an issue 

that we raised in the Sandy Task Force report. And I just want to 

echo Craig’s point that this is something that we need to act on 

without undermining what is an important step forward in making 

the program something that does not encourage development in 

places that—and I think it is important we strike that balance, and 

I think even it is possible that we could get some authority to start 

doing this even before the affordability study is done, if we can 

work correctly with you to get the right legislation. 

Senator BOOKER. I would agree with that, and I know that my 

colleagues from New York as well as the Chairman probably would 

agree with that as well, so thank you. 

Senator BEGICH. Thank you very much. 

Let me add to that, and then we will close this hearing, and that 

is, we have a piece of legislation, as you know, that is pending, and 

it dawns on me as I am sitting here, I am hopeful that you have 

reviewed that legislation that would delay the implementation 

based on the affordability study done. But I would ask, if you have 

not given input on that, at least to this Committee—you may have 

to individual members—I would greatly appreciate that, because 

what you are experiencing, Senator Booker, is a piece of legislation 

that was not crafted well. It was crafted with a good intent, but 

there are pieces of the equation that were discovered after the fact 

that now we are trying to fix. The problem is the Administration 

is bound by the law of what they must go through. If we went back 

in time, I bet you there would be a different discussion going on, 

knowing the facts we know today, but we are in this quandary. We 

have a bill pending. I know Senator Menendez has. I know I am 

a cosponsor, and the whole idea is to partially unwrap this to get 

us to the affordability study, get to an affordability of rates, and 

then deal with the rate structure, because there has to be reform. 

I think the Administrator has made it very clear. Everyone knows 

this. We have to have some reform there, but we have to get to the 

affordability and also the timetable. So it is one of these pieces of 

the legislation that, when you look at it today, you go, ‘‘Why didn’t 

we’’ fill in the blank? Now we are trying to fill in the blank, but 

the clock is working much faster for them to administer versus us 

legislatively. There is a pending bill, and we are anxious to try to 
41 

find a vehicle to move it. The Senate has a version; the House has 

no version as far as we know right now. 

So let me say the record will stay open until November 21 for 

additional questions that Members may have and submit to the 

Committee. I do want to thank the panel. Usually we break panels 

into two, but we thought because of all the uniqueness and experiences you all have it was important to have you all at the table. 

Thank you for being here. Thank you for being part of this hearing. And, again, to Senator Booker and to other folks from New 

Jersey and New York that were here, we will have continued efforts to follow this and make sure we are on the right track with 

the expenditures and activity with Hurricane Sandy because I 

think it is a good learning opportunity to make sure we improve 

our systems. 

So thank you all for being here. I appreciate it. The Committee 

now is adjourned. 

[Whereupon, at 4:33 p.m., the Subcommittee was adjourned.] 

(43) 

A P P E N D I X 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 
129 
130 
131 
132 
133 
134 
135 
136 
137 
138 
139 
140 
141 
142 
143 
144 
145 
146 
147 
148 
149 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 
167 
168 
169 
170 
171 
172 
173 
174 
175 
176 
177 
178 
179 
180 
181 
182 
183 
184 
185 
186 
187 
188 
189 
190 
191 
192 
193 
194 
195 
196 
197 
198 
199 
200 
201 
202 
203 
204 
205 
206 
207 
208 

Æ